Gold Coast property industry expert says Southport needs new office tower

A GOLD Coast commercial manager says growing demanded for space in the Gold Coast’s CBD means we need a new tower. And there’s one simple reason.

SOUTHPORT needs another a-grade office tower, Savills Gold Coast commercial division manager Doug Garvie says.

The industry veteran, who recently took on the role of commercial manager at Savills, said while no new towers are planned for the CBD, the demand is there from tenants.

He pointed towards Zupp Property’s success in filling 64 Marine Pde after its acquisition in 2014 for $10.7 million.

“Zupp bought a building that was tired, spent a lot of money upgrading the offices and facilities. Then all of a sudden its full. There are one or two vacancies but its nearly full. People are prepared to spend money to go into quality space.”

Doug Garvie, commercial division manager at Savills Gold Coast

Mr Garvie said another factor fuelling demand is the increasing number of government agencies moving to the Gold Coast, who want to be located in the CBD.

“There is a need for another quality a-grade office building in Southport. I can see continuing the office market continuing to grow here. As Southport starts establishing itself as the CBD, there will be demand, particularly from government agencies who want to be in Southport.”

An industry expert says government agencies are keen to move to Southport. Picture: NIGEL HALLETT

Southport’s vacancy rate has been on a downward trajectory for years. In 2010 it was 21.8 per cent while at the start of this year it sat at 13.2 per cent.

Mr Garvie said he sees that trend continuing for the next few years, not just in Southport, but across the Gold Coast.

“We have the best occupancy levels since 2007/2008,” he said.

“I can see the trend continuing. There are more and more government departments relocating to the Gold Coast because there are competitive rents down here. For example, the NDIS is here, the NBN, the Australian Defence Force, and Centrelink has increased its back office space.”

The vacancy rate is on the decline (AAP Image/Dave Hunt)

Mr Garvie said the so-called “flight to quality” was partly due to the reduced gap in rents between a-grade and b-grade space.

“Rents for a-grade space have come back, but the same is not true for b-grade space. There is a difference, of $100sq m. But people would probably say, why would you not spend the extra $100 to get into quality space?”

Southport is the place to be (AAP Image/Dave Hunt)

Mr Garvie said another trend was the rise, once again, of co-working, or serviced office space.

“Co-working office or serviced office space is starting to take off again. In 2006, before the market crashed, there were three large serviced offices in Southport, and they were all humming. When the GFC came in 2007-08 they all closed down. All those people in the coworking spaces went into their spare bedroom or garage or places like that. I can see now they are all starting to come back out of their garages and bedrooms intro shared office or co-working office space. That is a trend Australia wide, not just the Gold Coast.”