Colliers report downgrades Surfers Paradise to ‘second tier’ retail precinct because of lack of family-friendly attractions

Landlords charge the highest retail rates on the Gold Coast but Surfers Paradise has just been downgraded in a shock new report that spells bad news for businesses in the area.

Retail space in Cavill Mall is the most expensive on the Gold Coast.

A NEW report says a lack of investment in the ultra-expensive Surfers Paradise retail precinct has downgraded the area to second tier status.

That’s the verdict of the latest Colliers International retail report by research manager Karina Salas.

The report says while huge amounts have been spent repositioning and refurbishing shopping centres at Pacific Fair, Robina Town Centre and Harbour Town, the Glitter Strip has lagged behind.

“The geographical spread of retail on the Gold Coast has expanded — there are more dining and entertainment precincts available outside of Surfers Paradise, hence why the foot traffic is not highly concentrated in the centre of the Gold Coast like it once was,” Ms Salas said.

Retail space in Cavill Mall is the most expensive on the Gold Coast.

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“As a result of this competition, landlords in Surfers Paradise have to strategically reposition their assets to attract retail operators that complement each other and offer unique experiences that attract customers.

“The traditional and well-established retail precinct has become a second-tier precinct.”

According to Colliers leasing agent Kelly Buxton that means more “family friendly” experiences, goods and services, and less night clubs and bars.

The centre of Surfers Paradise has the most expensive leasing rates for retail on the Gold Coast at between $4500sq m to $5500sq m in Cavill Mall, although Ms Buxton puts the rate slightly lower at between $3000 to $4000.

Big brands include City Beach, Foot Locker, Baskin & Robbins and Timezone in the Paradise Centre, which fronts Cavill Mall and also features Woolworths.

CBRE’s Rudi Scutti brokered a deal for the Sunglass Hut to move into Cavill Mall last year. Picture: Jerad Williams

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Foot Locker is a tenant in the Soul Boardwalk retail complex, which also fronts Cavill Mall, and sold recently to Macau casino boss Loi Keong Kuong for $90 million.

The Colliers report says sales over the next 12 months will be driven by competition between financial institutions and private investors and syndicates.

“That is due to the value proposition of the Gold Coast retail investments,” Colliers International national director of retail investments Stewart Gilchrist said.

“This is supported by the positive yield spreads of up to 100 basis points compared to Sydney and Melbourne’s indicative yields. During 2018, yields fluctuated in the range of 4.8 per cent to 7.5 per cent.

Timezone is one family-friendly attraction in Surfers Paradise: David Clark

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“Residential expansion driven by net interstate migration has created the demand for new regional and neighbourhood shopping centres developments to service the growing population.”

The report says the volume of transactions in 2018, at $549 million, was the highest seen in five years.

Ms Salas said supermarket and grocery stores continue to drive leasing activity.

“Data shows that supermarket and grocery store turnover is the largest contributor to Queensland’s retail turnover, accounting for 35.9 per cent of the state’s retail turnover in February (compared to the 2018 average of 35.5 per cent),” she said.

“New retail developments in the Gold Coast occupied by anchor supermarket tenants have been very successful in 2018. Four new Coles supermarkets located at Pimpama, Southport Park, Coomera Town Centre and Upper Coomera commenced operations in 2018.”