Gold medal growth for Gold Coast
One year until the Commonwealth Games kicks off and the Gold Coast is gearing up for growth. How can the property industry make the most of the market boom?
The 2018 Commonwealth Games will be held from 4 to 15 April 2018, attracting more than 100,000 visitors, athletes and officials to Queensland.
The biggest event in Australia over the next decade, with up to 1.5 million spectators expected to attend, the Games will inject $2 billion into the Gold Coast economy.
The event has already stimulated investment on the Gold Coast with a new light rail network, a $200 million airport expansion and an investment of up to $8 million at The Star Gold Coast, formerly Jupiters.
“The general view is that while the Games is just a two-week event, it puts the Gold Coast on a world stage and is generating a lot of interest in South East Queensland,” says Tania Moore, joint managing director of Knight Frank Australia on the Gold Coast and chair of the Property Council’s Gold Coast committee.
Mantra Group chief executive officer Bob East says tens of thousands of room nights will be required during the Games period, but visitor numbers are already on the rise.
“Extensive team business has caused the average length of stay at our properties to increase substantially in the lead up to the Games,” he says.
East predicts Queensland tourism will hit a record high after the Games, and is expecting a “strong uplift in occupancy” throughout 2018.
The Star Entertainment Group is equally optimistic.
“The closing ceremony of the Games will not be the end. It will be the beginning of a growth story for the Gold Coast, and the opportunity for businesses to continue the momentum and growth pipeline we’re seeing today,” says Geoff Hogg, The Star Entertainment Group’s managing director for Queensland.
“We see enormous potential for the region in terms of long-term tourism and economic growth.”
The company is currently upgrading and expanding The Star Gold Coast. Six food and beverage offerings and 596 refurbished hotel rooms are among the newly-released features. At the front of the property, the Gold Coast’s first six-star hotel in more than 15 years is also taking shape.
A new 200-metre hotel and apartment tower on Broadbeach Island is also underway. The 4.5-star tower is the first of up to five as part of a joint venture with partners, Chow Tai Fook and Far East Consortium.
Earlier this year, The Star Entertainment Group also announced a $140 million acquisition of the Sheraton Grand Mirage Resort, the Gold Coast’s only five-star beachfront resort. This property will be enhanced over time.
Over at the Gold Coast Airport, a major civil works program is underway.
Chris Mills, Queensland Airports Limited’s chief executive officer, is overseeing a property strategy which will “expand the airport’s role as an economic and aviation hub” in South East Queensland and northern New South Wales and will “complement the airport’s primary aviation function with high quality business, education and lifestyle offerings.”
The airport has recently expanded its landholdings by about 18ha, and is now looking to integrate its new acquisitions.
“The airport precinct is already home to the Gold Coast’s Southern Cross University campus, which is growing rapidly, and we will work with the University to accommodate their future growth needs. We are also moving forward with plans for an onsite hotel with up to 200 rooms, located near the terminal that will provide high-quality accommodation for all travellers,” Mills explains.
“Eventually we expect to see the light rail come down to the airport and beyond, and we have planned our development activity around this.”
Optimism is in the air throughout the Gold Coast, Knight Frank’s Moore says.
She points to the “positive vibe” within the retail sector and the upgrade to Pacific Fair, but says the office market is equally upbeat, as “rents increase, incentives come back and landlords become more positive about their assets”.
Moore says Knight Frank is modelling a sub 10 per cent vacancy rate for commercial office across the city leading into the Games, and this downward trend will continue with only 5,000 sqm of new space intended to be built in the near future.
“The take up of office space as a result of the Games has been minimal – and most of that has been industrial properties because of storage requirements. We don’t expect a flood of stock being added to the market after the Games.”
The residential sector is just as buoyant. Moore says the Gold Coast has been driven by population growth resulting in around two per cent vacancy across the market.
“With the banks taking a very cautious approach to development post-GFC, the city has been fortunate that there has been limited new supply. The Gold Coast is attracting interest from investors and first home buyers due to price points significantly lower than Brisbane, Sydney and Melbourne,” she says.
But the Gold Coast cannot afford to waste the once-in-a-lifetime opportunity the Games presents, says Wyndham Hotel Group’s Barry Robinson.
The president and managing director of Wyndham’s South East Asia and Pacific Rim brands says improved infrastructure, attractions and sporting facilities that remain will add “even more” to the city’s appeal.
But sustaining the tourism boom demands “better roads, faster trains and improved connectivity.”
“The link between Brisbane and the Gold Coast is inadequate long-term. It needs major improvements via an enhanced road network and the introduction of a high-speed rail system that links with the Gold Coast’s light rail system.”
Robinson says the lack of fast and free Wi-Fi also has a negative impact on the Gold Coast’s reputation, “particularly for our biggest and most lucrative market of Chinese tourists”. He’d like to see the Games be a catalyst for improved connectivity.
“For the Gold Coast to grow into a 21st century city its attractions, infrastructure and entry points need to be revitalised,” he says.
“Without these improvements we will not be able to capitalise on the Games opportunity, nor the projected visitor numbers from Asia.”