Thursday 1 February 2024
Sunshine Coast office vacancy remains constrained
Vacancy rates for the undersupplied Sunshine Coast office market are still the second lowest in the country according to the latest results from the Property Council’s Office Market Report.
The office vacancy rate on the Sunshine Coast increased marginally from 4.0 per cent in January 2023 to 5.0 per cent in January 2024, according to the latest Property Council Office Market Report. Vacancy on the Sunshine Coast office market had previously peaked at 21.8 per cent in 2019 before steadily dropping each year until 2023.
Queensland Executive Director of the Property Council Jen Williams said that despite the overall vacancy rate increasing, office supply on the Sunshine Coast remained extremely constrained.
“Office vacancy rates on the Sunshine Coast are the lowest in Queensland and also the second lowest in Australia, eclipsed only by Hobart,” Ms Williams said.
“While there is some new supply set come online in 2024, vacancy rates will remain compressed until at least 2026, when 50 First Avenue in the new Maroochydore City Centre is completed.
“In the current high-cost environment, it is extremely challenging for new office projects to stack up financially and this is set to impact the supply of commercial office space right around South-East Queensland.
“The latest results also reveal the ongoing flight to quality on the Sunshine Coast with the “A Grade” segment of the market experiencing positive demand.
“With new marquee office projects slated to be delivered in the city centre it is likely that the transition from older assets to more premium ones will continue,” Ms Williams said.
Brendan Robins Director at CBRE and Chair of the Property Council’s Sunshine Coast committee explained it would remain challenging for businesses to find suitable office space on the Sunshine Coast over the coming years.
“Despite the increase in the overall vacancy rate it will remain hard for new businesses who are looking to get a foothold on the Sunshine Coast to find a space that suits their needs – especially if they are looking for a significant portion of space in the premium end of the market,” Mr Robins said.
“We do anticipate more sub-lease opportunities over the next few years as tenants move to quality accommodation.
“Maroochydore and Birtinya are our two main office precincts with limited opportunities in the 500sqm plus range.
Office vacancies are calculated on whether a lease is in place for office space, not whether the tenant’s employees are occupying the space or working from home.
Media contact: Bryn Moffatt l 043217 666 13 | [email protected]