Gold Coast property market: Commercial property transactions fall 40 per cent in 2023

Commercial property sales have plummeted 40 per cent in the past year, according to a new report but real estate agents say the numbers don’t reveal the full picture.

Commercial property sales have plummeted 40 per cent in the past year, with the amount of office space available becoming increasingly scarce.

Transactions of retail, office and industrial space on the Gold Coast topped $648m in 2023, new data released by Colliers International shows.

Industrial sales were up, from $285m to $346m, however retail sales fell sharply from $675m in 2022 to $193m

Colliers Director Steven King argued the data didn’t tell the whole story.

“If you looked at the data at face value and saw a 39 per cent drop in transactional activity across the sector you would automatically assume we are in some kind of downturn,” he said.

“But the reality of the situation is that institutional and private investors are holding onto their assets because of the buoyant sentiment on the Gold Coast, driven by migration and infrastructure growth.

Colliers Gold Coast director Steven King.

“This is resulting in a reduction in stock coming onto the market which has significantly reduced the number of transactions across the retail, industrial and office markets.

“We are also seeing incredible interest from private investors and institutional investors who want to gain a foothold on the Gold Coast but are somewhat restricted in being able to get into the market.”

Mr King said 2022 had been a strong year for retail property sales, with one of the biggest being the sale of Homeworld Helensvale for $265m.

The report warned:

“Continued uncertainty in the macroeconomic environment has prompted potential buyers to exercise caution, resulting in yields softening by 75 to 100 basis points across all sectors from their peak levels.”

Gold Coast skyline. Picture: NIGEL HALLETT

According to the data:

* Office sales ticked slightly higher despite the lack of new product, from $103m of sales in 2022 to $120m last year.

* There were none of the high-figure sales recorded in the previous year, with just six of the 107 sales topping $30m. Most of these were from industrial property.

* Many of the sales were below $5m.

A report released in November showed the office vacancy rate actually eased slight, rising from six per cent to 6.3 per cent during the previous six months but the report reveals it will plummet again in 2024.

A-grade office buildings have the lowest level of vacancy, reaching just 4.6 per cent, with the largest supply increase was found in Robina-Varsity Lakes where more than 6820sq m was added the past six months.

Long-term data shows the contracting vacancy rates in recent years as construction of new office buildings has essentially ceased.

In January 2021 the vacancy rate hit 14.3 per cent amid the pandemic and widespread office closures.

The Property Council of Australia’s 2022 Mid-Year Office Market Report showed office vacancies had fallen from 10.1 per cent in January that year to 8.1 per cent by July.

Vacancy rates and previously gone as low as single-figures at the height of the 2000s development boom between 2004 and 2008

At least three new towers with large amounts of office space have been proposed in the past two years but none are yet to be built.