11 Dec Sunshine Coast Commercial Office Update Nov-2014
The Sunshine Coast recorded the third highest improvement in vacancy of any market in the country, and along with the Gold Coast was one of only six markets to record a positive vacancy shift over the period, Queensland Executive Director of the Property Council of Australia Kathy Mac Dermott says.
After recording a 0.5% vacancy increase between 2012 and 2013, the Sunshine Coast has experienced a decrease from 14.1% to 12.3% in the most recent report. This is due to 2,185 square metres of net absorption and 700 square metres of withdrawals.
Effective rents have continued to struggle especially for B & C grade stock around Maroochydore with incentives of typically two to three months on a three year lease. A grade stock is still in demand and has held its rental level reasonable well.
Face rents within the main centres
- A Grade – $280-350/sqm,
- B&C Grade – $180-$270/sqm
Prime yields ranging from 7.5%-8.5% and secondary yields at 8.5% and above.
There is a considerable supply of secondary (B&C Grade) stock throughout the Sunshine Coast; however the overall vacancy is decreasing.
There is limited demand for secondary stock, which is reflected in capital values and face rents. A grade stock is still sort after especially within the main strips and hospital precinct of Kawana.
Future Value Forecast
Given the overall slowdown and regression of property values on the Sunshine Coast within the last 6 years, we would expect future value trends to be slowly recovering. This slow moving correction is evident by the sharp decline in the vacancy rate, which should continue to fall as overall confidence returns.