THE GOLD COAST office markets have endured mixed results after 2020’s year of uncertainty due to COVID-19, according to Ray White’s latest Between the Lines* commercial research.
The report showed across the coast there was some rationalisation of office space which grew vacancies, however towards the end of 2020, enquiry levels rebounded with several new small businesses emerging – borne out of changing employment positions of many locals.
“A rapid growth in new business registrations has occurred with many start-up businesses quickly outgrowing their home location,” said Ray White Commercial Gold Coast Senior Agent Office Leasing Luke Boulden.
“This has been driving demand for accommodation that’s notably more affordable and is lower grade stock. This has helped the face rental position which has had little impact by COVID-19, yet incentives have seen an upward shift moving the effective rental levels down.”
“Businesses have been forced to quickly adapt to a remote module, shifting the requirement for traditional office spaces at a degree we haven’t seen in the past, and despite an increase in vacancy across the board, demand remains evident across A and B grade markets.
“A key driver for up-take is a natural downsize as companies look to adapt to remote working and hot-desk modules, reducing their overall size requirements, and assisting in cutting costs.”
Mr Boulden said affordability was also a major factor in relocating corporate locations across the Gold Coast.
“Prime rates are a fraction of what has being seen across our capitals and there are also sizable incentives being offered,” he said.
“So, our office market is proving to be an attractor to larger blue-chips and major organisations wanting to tick the above boxes, in addition to capitalising on our growing corporate network, whilst also harnessing the lifestyle we have to offer.
“With new development supply limited in 2021 and minimal increase in the sub-lease market, there’s confidence that current vacancy rates will quickly retract to pre-COVID-19 levels and continue to tighten as the trends originally indicated.”
Ray White Commercial Head of Research Vanessa Rader said that across the Gold Coast, prime assets remained between $495 to $560psqm.
“This is an average of $520psqm, however, over the next 12 months – with incentives – they will likely grow from their 15 to 20 per cent range,” she said.
“Metricon exited their previous tenancy during the Property Council of Australia reporting period, and had not yet occupied their new 4,275sq m tenancy at Acuity Business Park which has also been counted as vacant stock, impacting the overall A-Grade vacancy rates.
“TAFE has also committed to Alecon’s Acuity Business Park and this will see a purpose-built 6,770sq m building with construction commencing at the tail end of 2020.”