Southport needs another tower

SOUTHPORT needs another a-grade office tower, Savills Gold Coast commercial division manager Doug Garvie says.

The industry veteran, who recently took on the role of commercial manager at Savills, said while no towers are planned for the CBD, the demand is there from tenants for a new building.

He pointed towards Zupp Property’s success in filling 64 Marine Pde after its acquisition in 2014 for $10.7 million.

“Zupp bought a building that was tired, spent a lot of money upgrading the offices and facilities. Then all of a sudden it’s full. There are one or two vacancies but it’s nearly full. People are prepared to spend money to go into quality space.”

Mr Garvie said another factor fuelling demand is the increasing number of government agencies moving to the Gold Coast, who want to be located in the CBD.

“There is a need for another quality a-grade office building in Southport. I can see the office market continuing to grow here. As Southport starts establishing itself as the CBD, there will be demand, particularly from government agencies who want to be in Southport.”

Southport’s office vacancy rate has been on a downward trajectory for years. In 2010 it was 21.8 per cent while at the start of this year it sat at 13.2 per cent.

Mr Garvie said he sees that trend continuing for the next few years, not just in Southport, but across the Gold Coast.

“We have the best occupancy levels since 2007/2008,” he said.

“I can see the trend continuing. There are more and more government departments relocating to the Gold Coast because there are competitive rents down here.”

Mr Garvie said the so-called “flight to quality” was partly due to the reduced gap in rents between a-grade and b-grade space.

“Rents for a-grade space have come back, but the same is not true for b-grade space. There is a difference, of $100sq m. But people would probably say, why would you not spend the extra $100 to get into quality space?”

Mr Garvie said another trend was the rise, once again, of co-working, or serviced office space.

“Co-working office or serviced office space is starting to take off again. That is a trend Australia wide, not just the Gold Coast.”