The Gold Coast commercial property sector is in pole position to emerge as one of the fastest growing in Australia over the next decade according to a comprehensive report by real estate giant Colliers.
Healthy population growth that ranks among the country’s strongest combined with substantial investment ahead of the 2032 Brisbane Olympic Games are the main drivers for the popular coastal strip, along with tourism recovering since the height of the pandemic.
Colliers Gold Coast director Steven King said uncertainty in areas such as construction and housing supply were having an impact and rising construction costs could see some development sites stall. But long-term, optimism among industry players remained strong in light of the estimated $20 billion of infrastructure slated for the region. “That's a big factor — people look at that,” Mr King said.
Ripe for recovery
The Colliers Gold Coast Market Review 2022 Gold CoastCoast Market Report June22 FINAL V3.pdf brands the region “one of the epicentres of the post-COVID recovery”. Since 2020 the south-east Queensland hotspot has recorded record levels of investment and attention of major national development players. This appeal looks set to remain now the Gold Coast will be the location for numerous Olympic events as well as both the Olympic and Paralympic athlete’s villages. The complexes will be built next to the town centre of Robina, a master planned residential community developed over the last 20 years with the intention of creating a new centre for the Gold Coast. The villages will provide accommodation for over 2600 athletes and officials during the games.
Major infrastructure projects on the Gold Coast include:
- Gold Coast Airport expansion: $347m
- The Star Broadbeach: $2b
- Southport CBD rejuvenation: $5b
- Health and Knowledge Precinct: $5b
- Light rail stage 3: $1b
- M1 upgrades: $5.2b
- Rail upgrades: $2.2b
Other development projects pumping money into the Gold Coast are a TAFE campus, a new resort, a potential 9000 seat entertainment centre and a bus network to link to the light rail. Suburbs around Southport, the Gold Coast’s central business district, are forecast for some of the area’s greatest growth while the CBD itself has attracted up to $5 billion in private and public investment.
The Colliers report describes the economic performance of the Gold Coast region in the past two decades as nothing short of “stellar” due to the fact it has almost doubled in size over that time to record a $39.24 billion economy in 2021. That figure was an increase of 2.6% from the previous 12 months and up from $20 billion in 2002. The Gold Coast economy (measured by Gross Regional Product) now represents around 10.4% of the State’s GSP (Gross State Product) “making it an important component to support Queensland’s future economic growth”.
Another factor working in the Gold Coast’s favour are attractive purchasing conditions Mr King said. “On a rate per metre for what you're buying sites for, a rate per metre of what you're buying houses for, it’s on the cheaper side in comparison to everywhere else on the coast.”
Commercial sectors are already seeing an upturn. Colliers’ analysis found the Gold Coast office market recorded a second six-monthly positive net absorption figure of 4803 sqm which brought net absorption for the last 12 months to 17,216 sqm to create the strongest result since July 2014.
Even more encouraging was the sale of the Gold Coast’s most prestigious office asset - 50 Cavil Avenue, Surfers Paradise for a record $113.5 million on an initial yield of 6.80%. The sale pushed Gold Coast office market total transaction volumes for 2021 to $246.1 million, the highest level since 2007.
Positive indicators have also emerged in the retail and industrial sectors. Gold Coast retail was hit hard during covid-driven border closures and lockdowns, yet last year retail sales volumes across the region totalled $867.8 million - the second largest annual result on record and double the annual 10-year average of sales volumes. Likewise, the region’s industrial market had a record 12 months last year driven by a shortage of supply, strong population growth, the appeal of e-commerce and a decentralisation of businesses from Brisbane, according to the Colliers report.
As for the population growth, the Gold Coast, already Australia’s 6th largest city, is the country’s most popular destination for internal migration. The area lays claim to Australia’s highest net migration statistic of 6939 while government projections show regional Queensland forecast to experience the strongest levels of population growth outside major cities in coming years with a projected growth of 13.3% compared to regional Victoria at 12.5% and regional NSW at 7.5%.