ARTICLE: Gold Coast Bulletin
Article written by Megan Birot, Gold Coast Bulletin - March 13, 2017 12:00am
Acknowledgement: Photo of Knight Frank joint managing director Tania Moore was taken by Picture Mike Batterham
BUSINESS owners are likely to be slugged with higher rents as the Gold Coast records its lowest office vacancy rates in eight years.
The Property Council of Australia’s Office Market Report has revealed a decrease in vacancy from 14.3 to 12.2 per cent in the past six months — half the post-GFC peak of 24.1 per cent in 2010.
Expanding government departments, and growing local businesses are driving the demand, which could see vacancies dip below 10 per cent by the end of the year.
Gold Coast Central Chamber of Commerce president Martin Hall said the decrease in office space would have little impact in the short term for businesses locked into leases, but that new commercial tenants could face higher prices.
“In the long term business owners looking for new premises could end up paying more,” he said.
“This will lead to upward pressure on commercial rents, particularly in good quality buildings in good locations.
“For most businesses, being in a good location is a contributing factor towards their success and a lack of good quality office or retail space limits the options for business owners.”
Knight Frank joint managing director Tania Moore said continued business confidence would see office vacancy rates on the Gold Coast plummet below 10 per cent by the end of the year.
“We are heading to a landlord driven market which will see rents increasing and incentives reduced which historically been a trigger point for discussion about future construction,” she said.
“We have seen an increase in activity from the three tiers of government with National Disability Insurance Agency securing just under 3000sqm in Robina as its new Queensland regional headquarters.
“There has also been strong growth in the education sector with a number of large operators in the vocational training area establishing on the Gold Coast with the likes the New York Film Academy setting up at Southport Central along with existing operators Imagine Education and Inforum Education expanding.”
The Robina and Varsity Lakes precinct experienced the biggest decrease in vacancy rates to 6.9 per cent while Southport recorded a 2.3 per cent drop to 13.2 per cent on the back of State Government expansion in the area.
Broadbeach was the only submarket experiencing an increase to 10.8 per cent, which Ms Moore said was due to McGrath Real Estate and the Commonwealth Bank vacating Albert Avenue.
Ms Moore said rates would continue to plummet on the back of increasing demand and lack of supply with no commercial projects due to be completed past 2019.