Southport has been attracting more commercial tenants and investors in the recent times resulting in decreasing office vacancy and rising capital values. Southport is the largest commercial precinct on the Gold Coast with over 150,000sqm of office space.
Cameron Wilson, Director in Charge at Colliers International on the Gold Coast, said Southport’s office vacancy rate is expected to further tighten over the coming 3 years with the upcoming Commonwealth Games and Queensland Government’s Priority Development Area designation and provisions being the key drivers.
“Current office vacancy in Southport is assessed at 13.8 per cent; five years ago this figure was close to 22 per cent. As a result rental rates are firming and with that, capital values are rising and investment yields are compressing.
“Two years ago, there was over 5,000sqm of small strata offices for sale in Southport Central that were achieving prices of around $2,200 to $2,700 per square metre. In the last 6 months we have seen this on market rate decline to around 1,500sqm and a rise in capital values of about 20 per cent, which equates $2,500 to $3,200 per square metre.
“Colliers International is aware of several tenants relocating into Southport to take advantage of Queensland Government provisions and ease of planning, with the top two industries moving into the area being educational/training providers and health/medical groups.
“Over the past 12 months, sales of major commercial holdings in Southport indicate a strong appetite from investors looking to secure a foothold into the area for both passive investment and future mixed use developments,” said Mr Wilson.
Ed Howard, Manager of Office Leasing at Colliers International said Southport offers some of the best quality office space at the best prices with A Grade corporate space ranging from $360 to $460 gross including outgoings per sqm per annum plus incentives.
“Several building owners have undertaken renovation works to their premises in the past two years and we are expecting others to follow suit to ensure a range of quality space is available to the leasing market.
“Most recent examples include 64 Marine Parade extensively renovated by Zupp Property Group; Maylake’s Kay House at 35 Scarborough Street; The Scarborough Centre at 40 Nerang Street; 7 Short Street, and Darrell Gregor’s 1 Short Street. More office refurbishments are expected.
“Few building owners have given sufficient thought to NABERS Star ratings, and we believe further investment into this will attract government or corporate tenants that place increasing value on occupying space with a more energy efficient rating,” said Mr Howard.
According to James Crawford, Director of Investment Services at Colliers International, Gold Coast City Council’s infrastructure developments in the area are supporting its growth. “Recent Smith Street Motorway upgrades have improved commuter access during peak times. In addition to this the Broadwater Parklands Stage 3 upgrade is well underway and continues to improve the overall amenity.
“We believe the continuation of the Light Rail connection with Helensvale and the north western suburbs of the Gold Coast is a critical piece of infrastructure that will truly link the Gold Coast to Brisbane. Once a broader population can access Southport CBD, many of the proposed major residential and commercial developments in Southport will become a reality.”