Gold Coast office vacancies at 14-year single-digit low as city keeps attracting new residents

The property squeeze has hit the commercial sector, with supply of available office space dropping to a 14-year low. Here’s why

Office vacancy on the Gold Coast has dropped to single digits for the first time since 2008, as the property squeeze hits the commercial sector.

Vacancy on the Gold Coast sunk from 10.1 per cent in January to 8.1 per cent by July, according to The Property Council of Australia’s Mid-Year Office Market Report.

The squeeze has continued despite Australian Bureau of Statistics data which shows the number of people working from home was the highest ever recorded.

According to the ABS, 41 per cent of employees regularly worked from home as at April 2021 nationwide, with the number rising to 64 per cent among managers and professionals.

The bureau is yet to report data from 2022.

Queensland executive director Jen Williams said unrelenting demand had pushed supply in all categories of office space, with the trend escalating in the past six months.

“A Grade office across the various locales recorded the highest vacancy decrease, dropping from 11.5 per cent to 7.1 per cent over the six-month period,” Ms Williams said.

“This is consistent with the flight to quality we have seen over recent years, and the trend to

more sustainable, collaborative workplaces.”

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Property Council of Australia's QLD Executive Director Jen Williams. Picture: Tara Croser.

Ms Williams said the Gold Coast commercial sector was a continued beneficiary of pandemic-inspired lifestyle choices, with strong population growth leading to more people and businesses moving to the region.

“In the global war for talent, employers are seeing the physical office as a way to attract and retain staff,” she said.

“The Gold Coast has come a long way from its circa 20 per cent vacancy rates a decade ago.

“With demand set to continue, the new challenge for the Gold Coast will be building enough supply to meet the needs of the market.”

CBRE senior director Tania Moore said the historically low vacancy levels were being driven by demand from the SME sector and the return of education sector following the reopening of international borders.

“The Gold Coast office market has not seen single digit vacancy since the five-year period between 2004 to 2008, regardless of total office space increasing by 86,000 sqm at that time due to the emergence of the Robina/Varsity Lakes precinct and Southport Central,” Ms Moore said.

Tania Moore, Senior Director at CBRE.

“These ongoing market conditions are creating occupier frustration due to the lack of available quality fitted suites within the 100-200sqm size range and for options of 1000 sqm plus.

“With limited new supply additions this will continue to be an ongoing issue for the foreseeable future.”

Ms Moore said another 6800 sqm of office space was set to hit the market this year, including at 26 Lawson Street, Southport, where existing precommitments had left 1200 sqm available to the market.

Solicitor Simon Bennett is developing 26 Lawson St, Southport. Picture: Jerad Williams

The M1 Connect office building under construction on Siganto Dr, Helensvale.

The completion of the M1 Connect project in August will add 5600 sqm of new office space to the northern Gold Coast corridor supporting population growth outside of the core Gold Coast office precincts.

“There are a number of new developments being mooted however it is unlikely these projects will be completed until 2024 and beyond as they are subject to the appetite from developers to build without some level of substantial precommitment.”

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