Time to look at big end of town on the Gold Coast

IGNORING the top end of the Gold Coast’s corporate sector, could see the city miss the opportunity to fulfil its true potential, writes Adam Merlehan.

THE Gold Coast is a fantastic, liveable city, but it lacks one key element necessary to propel it into a “golden age” and which currently leaves it susceptible to the highs and lows of a volatile tourism industry and property market cycles.

That missing element is a major corporate sector.

We will know the city has come of age when a few ASX100 corporates open offices, or large government departments take residence in the city.

Adam Merlehan, Managing Director Merlehan Group. Photo: Supplied.

A strong corporate presence drives jobs growth and demand for high-end professional services, building out the intellectual capital in the city. It gives talent and future leaders another reason to stay rather than leave for further career opportunities. It improves the quality of the education sector by creating a deeper and direct connection with industry, and it fuels a more mature construction sector (a key driver of the local economy).

The Gold Coast construction sector is dominantly driven by residential- and tourism-related development. In recent years this has been supplemented by sugar hits of infrastructure investment, like the light rail and Commonwealth Games, but local builders do not plan long term around infrastructure projects. Local builders are small-to-medium in scale and understand how quickly the tap can turn off in the city, particularly if they have seen a few property-market cycles.

This will remain the case unless the Gold Coast’s economic base matures by attracting a more significant corporate presence, driving regular commercial development activity for local builders and changing external perceptions of the maturity of the city. It is not what is said but what is seen that matters.

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GCB House and Land feature — Gold Coast generic

The good news is that the prospect of attracting major corporates is getting brighter each year.

The recent shift to cloud computing, roll out of the NBN, fundamental shift towards a casualisation of workplaces and remote working, $300m upgrade to Gold Coast Airport, proximity to Melbourne and Sydney and the new transport infrastructure spine in the form of the light rail are all attributes conducive to attracting a more sizeable corporate presence.

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However, the cost of living disparity in relation to Sydney and Melbourne may be the biggest drawcard. The chief economist of the REA Group (owner of realestate.com.au) recently noted that the number one Australian location searched by Sydney residents was the Gold Coast.

However, it will take visionary civic leadership and another cycle or two before we see large corporates show interest in taking residence in the Gold Coast. About three years ago I noticed large national and international corporates focused on cutting costs by reducing headcount and capital city floor space. This was the opportunity for an approach by forward-thinking civic leadership to attempt to lure one or two to open an office on the Gold Coast — while their CFOs were focused on cost reduction.

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05/02/2018: Sydney ASX generic photos. Pic by James Croucher

Even if the city had to underwrite rent in exchange for a minimum five-year lease and 300 FTE headcount, it would be worth it. If one big name came, the lifestyle and cost-of-living benefits for staff and reduced long-term occupancy costs for businesses would be noticed.

I’d love to see the city channel inspiration from other coastal cities that enjoy a thriving corporate sector, unique culture and large tourism sector.

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San Francisco in the US and Oslo in Norway are two larger examples, even Miami and Florida, known internationally for its beaches, glitz and glamour, has a thriving corporate sector that underpins its economy.

To not prioritise building-out the top end of the Gold Coast’s corporate sector to instead focus on more tourism, will see the Gold Coast miss a fantastic opportunity to fulfil its true potential and come of age.