Future bright for Sunshine Coast office market

THE future for the Sunshine Coast was bright, as the recent SEQ Cities Deal offered nothing but positive news for the region, according to Ray White’s latest Between the Lines* report.

Ray White Commercial Northern Corridor Group Principal Michael Shadforth said the Deal secured the area as one for growth of a liveable, vibrant, economically viable city harnessing local business, knowledge and entrepreneurship.

“Population growth continues to be strong with the appeal of lifestyle and affordability now seeing greater interstate migrants come to the region after a strong few years of losses to the southern states,” Mr Shadforth said.

“But, as housing stress becomes more apparent in these locations, the attraction of the Sunshine Coast and its economic and business possibilities have been heightened for many young families and start-up businesses.”

Ray White Head of Research Vanessa Rader said the recent Property Council of Australia’s office market report highlighted the growing demand for employment (office) space across the Sunshine Coast.

“Local jobs growth continues to be increasing, heavily influenced by the growing small business numbers all seeking accommodation,” Ms Rader said.

“This increased business demand has benefited both the industrial and office markets in this area with a large uptick in investment activity.

“The office market however has gone through a period of rejuvenation over the past few years, the completion of new stock to this market over the past two years has provided much needed A grade accommodation to attract these smaller businesses.

“2018 saw the completion of 21,716sq m of new space including both the new Youi and Budget Direct Headquarters, while 2017 additions including Kon-Tiki (16,000sq m) and 50 Wises Road (5,200sq m).

“This high level of uncommitted supply additions was destined to increase vacancy levels to their current January 2019 rate of 21.8 per cent.

“Despite this historic high vacancy factor, the net absorption recorded over these two years were 5,334sq m and 7,139sq m respectively; this level of take-up akin to other much larger suburban markets around Australia like St Kilda Road and Macquarie Park.

“The flight to quality as well as business expansion has seen much of this vacant A grade stock absorbed in early 2019, with the likelihood of rapid vacancy reductions seen over the next 12 months, further aided by the withdrawal of secondary assets.”

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