A six year low for Gold Coast office vacancy
Office vacancy rates on the Gold Coast have continued to recover from the high levels experienced during the Global Financial Crisis (GFC), according to the country’s leading office vacancy study, the Property Council of Australia’s Office Market Report (OMR).
The mid-year OMR reveals the Gold Coast office market vacancy rate has improved from 16.7 per cent to 15 per cent over the past 6 months, the lowest level since July 2008.
The six months to January 2014 saw the greatest demand for office space on the Coast since the onset of the GFC. This strong demand has continued through to July and has resulted in over 21,000 square metres of net absorption over the past year, Queensland Executive Director of the Property Council of Australia Kathy Mac Dermott says.
“While the region maintains the highest vacancy in the country, the margin between the Gold Coast and other CBDs around the country has drastically reduced,” Ms Mac Dermott says.
“The difference between the Gold Coast headline vacancy rate and the Brisbane CBD has condensed from well over 15 per cent in 2011, to just 0.3 per cent now.
“This is a positive sign that activity and confidence is returning to the Gold Coast.
“Interestingly the only sub market on the Gold Coast to record an increase in vacancy was Southport. The vacancy rate in Southport rose from 13.7 to 14.2 per cent.
“There will be an increased focus on this region over the coming 12 months as the Southport Priority Development Area (PDA) and light rail begin to influence leasing and development opportunities.
“In addition, the Gold Coast’s modest supply pipeline suggests a further tightening of rates over the medium term – restoring leasing competition and development incentive to the market.”
Analysis & Commentary, Gold Coast, July 2014
Headline comments:
- Vacancy in the Gold Coast office sector decreased over the six months to July 2014 to its lowest level in six years
- This was due to positive demand
- Only the D Grade segment experienced negative demand over the period
- All locales experienced positive demand and a vacancy decrease over the period with the exception of Southport
Vacancy analysis:
- Vacancy decreased from 16.7 per cent to 15.0 per cent over the 6 months to July 2014, the lowest since July 2008
- The vacancy decrease was due to 9,635sqm of net absorption
- 13,422sqm of space was added over the period while 11,305sqm was withdrawn
By grade:
- A Grade – vacancy in this segment decreased from 20.3 per cent to 19.0 per cent due to 3,055sqm of net absorption. 3,862sqm was added and 2,207sqm withdrawn over the period
- B Grade – vacancy decreased from 12.8 per cent to 11.2 per cent due to 5,335sqm of demand. 9,560sqm of space was added over the period, while 6,804sqm was withdrawn
- C Grade – vacancy in this segment decreased from 16.8 per cent to 15.4 per cent due to 1,902sqm of net absorption
- D Grade – vacancy decreased from 28.1 per cent to 21.6 per cent due to 2,294sqm of withdrawals. Net absorption over the period was -657sqm
By locale:
- Broadbeach – vacancy decreased from 11.7 per cent to 8.8 per cent due to 852sqm of net absorption
- Bundall – vacancy decreased from 21.5 per cent to 16.9 per cent mainly due to 3,376sqm of net absorption. Supply additions totaled 11,103sqm while 11,305sqm of space was withdrawn
- Robina-Varsity Lakes – vacancy decreased from 11.8 per cent to 9.8 per cent due to net absorption of 2,740sqm
- Southport – vacancy increased from 13.7 per cent to 14.2 per cent due to -816sqm of net absorption
- Surfers Paradise – vacancy decreased from 29.2 per cent to 26.6 per cent due to 3,483sqm of net absorption. 2,319sqm of space was added over the period
Future supply:
- 8,163sqm of space is due to come online in the second half of 2014
- This is no further space in the pipeline after that
- A total of 4,924sqm of projects are mooted
Key market indicators, Gold Coast (aggregate)
| Grade | Vacancy, Jul 14 (%) | Vacancy, Jan 14 (%) | Net absorption, 6 months to Jul 14 (sqm) | Net absorption, 12 months to Jul 14 (sqm) |
| A | 19.0 | 20.3 | 3,055 | 5,344 |
| B | 11.2 | 12.8 | 5,335 | 11,695 |
| C | 15.4 | 16.8 | 1,902 | 4,573 |
| D | 21.6 | 28.1 | -657 | -472 |
| Total | 15.0 | 16.7 | 9,635 | 21,140 |
Key market indicators, Gold Coast (by locale)
| Vacancy, Jul 14 (%) | Vacancy, Jan 14 (%) | Net absorption, 6 months to Jul 14 (sqm) | Net absorption, 12 months to Jul 14 (sqm) | |
| Broadbeach | 8.8 | 11.7 | 852 | 1,353 |
| Bundall | 16.9 | 21.5 | 3,376 | 2,898 |
| Southport | 14.2 | 13.7 | -816 | 2,368 |
| Surfers Paradise | 26.6 | 29.2 | 3,483 | 2,174 |
| Robina – Varsity Lakes | 9.8 | 11.8 | 2,740 | 12,347 |
Media contact
Kathy Mac Dermott
Queensland Executive Director
07 3225 3000 or 0427 243 986
John Nguyen
National Research Manager
02 9033 1943 or 0410 449 210
For more information, visit www.propertyoz.com.au/officemarketreport