New Property Council Gold Coast office market research shows slight decline in vacancy rate following steady demand

New research has revealed which Gold Coast suburbs are in high demand when it comes to office space - and which ones are on the decline. 

BROADBEACH and Bundall have emerged as the most in demand office precincts on the Gold Coast in the past six months after both suburbs recorded reduced vacancy rates.

The latest Office Market Report released today from the Property Council – a key barometer of the health of the Gold Coast economy – shows the overall vacancy rate stabilising, falling from 12.9 per cent to 12.8 per cent for the second half of last year.

It follows steady demand from business for A-grade space in particular where the vacancy rate fell from 14.4 per cent to 12.8 per cent.

In Broadbeach vacant office space as a percentage of the total lettable area fell from 11.7 per cent to 10.5 per cent and from 11.2 per cent to 10.4 per cent in Bundall.

The vacancy rate increased from 11.6 per cent to 12.9 per cent for the first six months of last year after government departments vacated space and large companies downsized.

Retail Food Group moving to the Foxtel tower has helped to cut the a-grade vacancy rate.

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However, it wasn’t all good news with the vacancy rate climbing in both Southport (up 0.5 per cent to 15.6 per cent) and Surfers Paradise (up 0.3 per cent to 10.8 per cent).

Property Council Queensland executive director Chris Mountford said the new figures are “welcome news” for the industry.

“A-grade office stock has been the most popular, with almost 2000sq m of net demand leading to a healthy fall in vacancy for prime space,” he said.

The report estimates 9404sq m of new office space will come to the market this year.

That partly comes from a new building being constructed by Alder Constructions in Helensvale and 1500sq m of vacant space in the Acuity Business Park under construction in Robina.

The Acuity Business Park under construction in Robina will add 5937sq m of space upon completion.

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“With an influx of additional office space expected, the market will be hoping for

strong business growth in 2020 to ensure demand keeps pace with new supply,” Mr Mountford said.

Tania Moore, who is joint managing director of Knight Frank’s Gold Coast office, described the market as “subdued” for the six months to January.

“The core business sector of the Gold Coast being SMEs, remained cautious, which resulted in a higher level of tenant holdovers or short-term leases being reported, which supported the market remaining steady across most precincts.”

Ms Moore said there has been a positive start to the year with solid levels of activity across the market.

Surfers Paradise saw a slight increase to its vacancy rate for the second half of last year.

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“We anticipate positive levels of take-up for the six-month reporting period through the first half of this year,” she said.

CBRE’s director of office leasing Nick Selbie said the flight to quality continues, pointing towards Retail Food Group’s move to the Foxtel tower late last year where it subleased 1700sq m and helped to cut the a-grade vacancy rate to 12.8 per cent.

“Larger floorplates exceeding 1000sq m are in short supply, which has helped previously-mooted projects meet precommitment requirements,” he said.

Mr Selbie said Robina/Varsity Lakes has surpassed Southport as the largest office area on the Gold Coast, although he expected that to be temporary due to new space coming to Southport in the Health and Knowledge Precinct.

Savills’ Doug Garvie, who specialises in the Southport area, called the figures a positive result for the sector and in particular Southport.

He said it appeared a rising vacancy trend across the Gold Coast had stalled resulting in a small increase for the Southport CBD.