Sunshine Coast office vacancy in decline

The Property Council of Australia’s latest Office Market Report, released today, shows the office vacancy rate on the Sunshine Coast decreased by 2.7 per cent over the last twelve months, dropping to 9.2 per cent.

Queensland Executive Director of the Property Council, Chris Mountford, said a combination of increased demand in 2015 and withdrawal of space from the market has maintained the Sunshine Coast’s significantly lower office vacancy rate than the Gold Coast or Brisbane.

“There was a solid increase in demand for B-Grade office space over 2015, with very little new space added to the market last year,” Mr Mountford said.

“Throughout 2016, however, the vacancy rate is expected to increase with an additional 23,400sqm of space due to come online.”

“While this additional space will increase vacancy overall on the coast, currently the largest contiguous space available in the key markets of Kawana and Maroochydore is 300-400sqm.

“Therefore this additional supply may create an opportunity for larger tenants looking to relocate to the coast or local businesses who need to expand.”

The longer term outlook is less clear for the Sunshine Coast with very little new office space in the pipeline beyond mid-2016, and Council’s vision for a new CBD still several years away.

“As a relatively small market of circa 150,000 square metres, any stock additions or withdrawals have the potential to significantly impact on the overall health of the commercial market,” Mr Mountford said.

“The Property Council’s first event of 2016, being held at The Lakehouse on 26 February, will explore the impact that major projects, such as the CBD, will have on the future of the Sunshine Coast’s various property markets.”

 

Media contact: Chris Mountford |  M  0408 469 734 | E cmountford@propertycouncil.com.au

 

Analysis – SUNSHINE COAST MARKET

Headline comments:

  • Vacancy in the Sunshine Coast decreased in the 12 months to January 2016
  • The was due to withdrawals and positive demand
  • Only the B Grade segment recorded positive demand over the period
  • No space is in the pipeline over the medium term after 2016

Vacancy analysis:

  • Total vacancy decreased from 11.9 per cent to 9.2 per cent in the year to January 2016
  • This was due to 2,820sqm of withdrawals and 2,637sqm of net absorption
  • 1,213sqm was added over the period
  • Only B Grade recorded positive demand

Future supply:

  • 23,400sqm of space is due to come online in 2016
  • 4,386sqm is mooted

 

Key market indicators, Sunshine Coast (aggregate)