Limited space in Brisbane tipped to increase demand for office space on the Gold Coast as positive absorption continues
THE Gold Coast office market continues to remain tight with a vacancy rate of just 6.5 per cent, according to recent research undertaken by CB Richard Ellis.
The overall vacancy rate is down from 7.6 per cent recorded at the start of the year. Of the five major regions, Bundall has the tightest vacancy rate at 3.7 per cent, compared with Surfers Paradise at 6.2 per cent and Southport at 7.9 per cent.
CB Richard Ellis' senior manager -research, Craig Godber, says the Gold Coast has continued to experience strong tenant demand and currently has a total of only 23,400sqm of vacant office space, including only 3000sqm of A grade space.
"Despite the addition of over 27,000sqm in new developments to the Gold Coast office market over the year to July 2006, net absorption remains positive," says Mr Godber.
"Importantly, the take-up for the year to July was 25,000sqm, making it the fourth consecutive year of positive absorption.
"Limited space available in the Brisbane markets may also provide an opportunity for the Gold Coast to capitalise," says Mr Godber.
This research re-affirms figures released in August by the Property Council of Australia highlighting a market vacancy drop of 1.1 per cent in the first half of this year for the Gold Coast, with A and B Grade segments having the strongest demand.
"At a time when the region, and particularly Bundall, is experiencing low vacancy rates, rising demand and limited new stock, large, contiguous floor plates are particularly difficult to source away from new developments," says Mr Godber.
According to the research, a number of major projects totalling around 65,000sqm are in the supply pipeline for the next 18 months, including Stage 2 of the Corporate Centre, in Bundall.
The sale of the Corporate Centre for $52.86 million was the largest property transaction in the 2006 financial year.
Cromwell announced plans last month for a $400 million development of the landmark Corporate Centre, starting with Stage 2, a $45 million, 8,000sqm building.
Up to five buildings will be developed in the master-planned project by the Corporate Centre Development Alliance which comprises Cromwell, the privately-owned PacLib Group Pty Ltd and property identity Dan McVay.
Cromwell executive chairman Paul Weightman says construction of Stage 2 will commence in January, with completion due first quarter 2008.