Outlook for Sunshine Coast Office Market Encouraging
The Sunshine Coast office market has experienced reduced vacancy rates over the past few years, aided by the large Youii tenancy and other support businesses growing their footprint, says Ray White Commercial.
Ray White Commercial North Coast Central Managing Director, Michael Shadforth, said in recent times, however, new supply has been limited and somewhat demand led to keep low vacancies in check.
“During 2017 we have seen the completion of a number of new buildings and some movement in tenancies which will see a large turnaround in the current market conditions. The move by Youii to their new purpose-built facility highlights the confidence in the local economy while backfill space may take some time to be absorbed.
“The completion of other properties this year including 50 Wises Road and the Kon-tiki towers without full office commitment will further dampen the results over the next couple of years.
“Ray White Commercial forecasts vacancies could increase to 24.1% by the end of the year before starting its downward momentum driven by increased white collar employment growth to 19.0% the following year.”
Ray White Commercial Head of Research, Vanessa Rader, said the office market has yielded impressive results across many of the east coast markets.
“High employment growth particularly in the finance, property and technology sectors has improved vacancies in Sydney CBD and Melbourne CBD to 5.9% and 6.5% respectively despite the high supply which has been added to this market. Brisbane CBD continues to be under pressure by high supply and public administration being the main growth employer over the last few years. Despite the woes of Brisbane, Gold Coast has bucked the trend falling to a 10-year low vacancy of just 11.3%. Similar to the Sunshine Coast, local business demand and improved confidence in these locations has done much to stimulate interest by larger businesses and government tenants looking to expand or create new headquarters.”
Michael Shadforth said while the supply completions are high for the Sunshine Coast this year, the outlook is still encouraging.
“Demand is growing in the local area due to huge investment into the coast, while interest in these somewhat non-core locations is expected to continue as seen in the likes of Gold Coast most recently. The quality of the new office product will encourage a greater move into A grade stock and while total vacancies may remain high for the short term, we expect rapid improvements shortly thereafter.”