- Vacancies fell from 14.3% to 10.1% in a year
- The lowest level since the pre-GFC
Omicron-related disruptions have failed to increase office vacancies in Gold Coast, instead, a decline in the vacancy rate has occurred.
Vacancies fell to 10.1% in January, outperforming the major capital cities. The Brisbane CBD recorded a 15.4% rate, 14.5% in Adelaide and 11.9% in Melbourne.
Overall, the Gold Coast’s vacancy rate has fallen 4.2% across the past 12 months to reach its lowest level since the pre-Global Financial Crisis era.
Bede Blatchford, associate director of office leasing at Colliers International, said the market has been buoyed by significant leasing deals, which has fuelled positive net absorption of 17,216sqm throughout the year.
Bundall has a vacancy rate of 6.4% – the tightest among the Gold Coast office markets.
“This is a level we haven’t seen in years for Bundall,” said Mr Blatchford.
“Office vacancies on the Gold Coast are down from 11.3 per cent six months ago and 14.3 per cent this time last year, and we’re seeing solid demand continuing into the new year.”
Robina-Varsity Lakes was the biggest improver, with its 18.8% vacancy rate in January 2021 declining to 10.9% last month.
This decrease has been attributed to Centuria-owned 35 Robina Town Centre Drive which saw over 6,000sqm of office space leased throughout last year.
SME’s resurging
Although the Gold Coast secured bug leasers from major corporates last year, Mr Blatchofrd argued the strength of the local office market is thanks to the “resurgence and resilience” of small and medium enterprises (SME).
SMEs make up about of 70 per cent of Gold Coast office occupiers and they continue to see office space as an important part of their business,” he said.
“Many SME occupiers expanded throughout 2021, and that has been the catalyst for the Gold Coast office market’s strong performance.
“We have also seen businesses decentralise from CBD markets to take up space in regional areas such as the Gold Coast. The appeal for them is the lower density of population compared to CBD locations, reduced commute times for employees and less reliance on public transport, which are all factors that drive employee wellbeing and satisfaction.”
Unsurprisingly, face rents have increased throughout the Gold Coast with incentive levels stabilising.
This year, Collier expects conditions to improve due to a relatively limited office market development pipeline.
Across the key office precincts, two major projects – both in Robina – are currently under construction.
“We’re also going to see a continuation of the flight to quality theme from occupiers that will likely lead to more office buildings undergoing refurbishment programs as landlords take advantage of positive leasing conditions,” added Mr Blatchford.
“Businesses these days place a great deal of emphasis on staff wellbeing and satisfaction, and with the tighter labour market more businesses have been looking for office space that provides a workspace that employees want to be a part of.”
