A new report from JLL suggests cost of living pressures and interstate migration are set to push up the demand for Gold Coast commercial real estate.

In the 12 months to the end of March, Queensland was the most popular destination for domestic migration, overtaking Victoria with gains of 24,000 compared to 15,100. Most of the influx was from New South Wales, with migrants landing in the Gold Coast, as well as other smaller metropolitan centres.

With further population growth being projected in the Gold Coast, JLL believes this shift of people is translating to business confidence.

Residential outstripping commercial… for now

Lisa Murdoch, Valuations and Advisory, Investment Property at JLL says major building refurbishments and affordability are the key drivers for Gold Coast commercial real estate.

Gold Coast city centre A-grade gross face rents average A$456 per-square-metre versus A$586 in Melbourne and A$1,259 per-square-metre in Sydney.

However, lower land values mean commercial development is not yet a viable option for investors, with developers needing about $500 per-square-metre net to an office development worthwhile.

“The land is worth more as residential at the moment with most precincts allow either type of development,” says Murdoch. “Currently, rental growth hasn’t been high enough to go down the commercial route.” 

However, Gold Coast vacancy rates for A-Grade offices at their lowest since the global financial crisis, down to 12 percent and falling.

“With no new stock due to come online in the short term, the city will work through its vacancy, demand will keep bubbling away, and rental growth will accelerate. At this point, possibly over the next two years, I’d anticipate major investors starting to position themselves to transact,” says Murdoch.

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