Offices trump work from home, and other Queensland commercial news

Offices are making a strong come back on the Gold Coast as vacancy rates hit a new low. Queensland is also seeing new opportunities emerge with a mid-range eco-tourism site hitting the market just outside of Brisbane. Leasing activity for industrial also remains strong.

Gold Coast office vacancies lowest in 14 years

The 2023 Gold Coast Market report by Colliers has found that “work from home” (WFH) could be dead, as office demand rises and vacancy rates drop.

Colliers International Gold Coast Director Bede Blatchford said that a drastic increase in remote working and a decline in demand for office spaces was one significant effect of the Covid-19 pandemic.

“As a result of the pandemic, we certainly saw an increase in remote working; however, fast forward to three years since the start of lockdowns, and we are once again witnessing strong demand for office vacancy,” said Mr Blatchford.

“With a total vacancy of 27,467 sqm out of 454,149 sqm of total stock, the Gold Coast office vacancy rate declined to 6.0% in January – its lowest level in 14 years.

“The market is expected to remain competitive in 2023, with vacancies expected to continue to decline due to strong market fundamentals, a constrained supply pipeline and people returning to the workplace.”

SME’s seem to be buoying the Gold Coast market, with recent leasing activity strong in the sub-400 square metre market.

Exceed Capital took its 154 Varisty Parade property in Varsity Lakes to just three per cent vacancy, down from 45% when the company acquired the property in April 2021. Exceed also invested in a $2.5 million refurbishment of the property.

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To meet demand, Exceed Capital took a large single-floor vacancy of 1,100 sqm and split it into four tenancies, with new leases recently secured for all of them.

Blatchford said: “The strategy has revealed the depth of the Gold Coast office market for sub-400sqm occupiers.”

“Gold Coast is predominately made up of small to medium occupiers as opposed to the level of corporates in CBD markets. This sector accounts for most Gold Coast office demand which is currently driving a tightening of vacancies across the city’s key office precincts.

“It’s been the resilience of the SME-occupier sector that is supporting the local office market, and that is leading to a tightening of the overall vacancy rate.”

Eco-tourism site on the market

Located at 15 Lefthand Branch Road about an hour and a half west of Brisbane, the 2,165 square metre property that is set over 19 individual titles is up for sale.

The site is self-sufficient in water supply with five bores powered by solar across the property and graded tracks for transport. The property also includes a three-bedroom homestead, cattle yards, a four-bay shed, workshop and hay shed.

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Mount Haldon Station in Mount Sylvia is a biodiverse site, with CBRE’s Edward O’Dwyer noting:

“Due to the location and the peak elevation of Mount Haldon, there are a number of avenues investors can explore in regard to renewable energy or capitalising on biodiversity from an ecotourism and conservation perspective,” Mr O’Dwyer said.

“With different terrain across the property, distinct areas could also be maximised for differing uses and revenue streams such as public programs for camping, eco-cabins, horse riding and private events.”

“There is a gap in the marketplace for mid-range, affordable eco-tourism in regional locations and with the number of tourists to Queensland climbing and significant growth predicted for Southeast Queensland. The demand for nearby regional escapes will continue to increase.”

Industrial leasing activity

Frasers Property Industrial has announced leasing across Queensland, with the latest including 13,165 square metres leased to truck design and manufacturer Paccar Australia.

The property is located at 103-131 Wayne Goss Drive in Berrinba, some half an hour south of Brisbane.

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Paccar Australia will increase its footprint by relocating to the larger facility adjacent to its current premises in September 2023. The new facility extends to 13,165 square metres and includes a super awning for all-weather loading, as well as a solar system installation.

Frasers has also leased 15,186 square metres to packaging manufacturer, distributor, and visual communications company Orora Limited. The high-clearance warehouse will be used to store packaging items manufactured in Orora’s neighbouring facility. The premises features full drive around access and extensive awning area.

Ian Barter, Managing Director Australia at Frasers Property Industrial said: “As demand for high-quality facilities in key … Queensland corridors continues, our strong customer service and premium offerings are highly sort after by both existing and new customers.

“Our industrial assets in strategic locations have been crucial to our ability to secure deals with major national brands and long-term customers. We continue to have strong leasing activity and our portfolio continues to be 100% occupied”.

Article source: Queensland Property Investor

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