PRIME SITE OPINION GOOD THINGS IN SMALL PACKAGES
The demand for smaller tenancies – 100sq m for retail and office – is high on the Coast and it’s our city’s entrepreneurship that’s at the heart of it
AFTER working in the commercial property sector for more than 30 years and living on the Gold Coast for almost as many, I have seen the changing nature of property trends and the variable market conditions the Coast seems to produce.
The most prominent trend in commercial real estate on the Gold Coast is the increase in demand for smaller tenancies, with the most popular size being around 100sq m for retail and office and between 100250sq m for industrial.
Approximately 25 per cent of our inquiries at Smith Commercial are for tenancies of this size across all sectors of retail, industrial and office space and for both sale and lease opportunities.
I believe it is driven by the Gold Coast’s healthy undercurrent of entrepreneurship. The demand for small spaces for start-up businesses has skyrocketed. Many of our inquiries are for space in the Southport or Burleigh Heads area with commercial real estate in these hot spots held very tightly.
Furthermore, small business in the food sector makes up almost 50 per cent of our inquiries, along with a considerable spike in interest for space in mixed-use and shopping centres, like those available at the redevelopment of the Commonwealth Games Athletes Village at Southport.
We have recently launched an expressions of interest campaign for the retail precinct within the former Village with Woolworths and BWS already confirming their commitment.
The project is currently focused on the 25-shop retail centre and announcements will be made soon about the 1252 apartments for rent.
While small business is booming on the Gold Coast, the commercial property sector is struggling to keep up with a noticeable shortage of smaller tenancies to meet demand.
In response to demand, I’ve been encouraging commercial property owners and developers to futureproof their investment by looking for ways to split tenancies to accommodate the need for smaller spaces. Sometimes it’s as simple as adding electricity meters, and walls to subdivide the tenancies. We have done several recently, which resulted in an income lift of between 18 to 26 per cent. The demand for small industrial warehouses for both sale and lease is another area that has received considerable growth. Again, the demand for warehouse space of about 250sq m far outweighs the supply with buyers and tenants actively seeking this tenancy size.
For developers in this sector, I recommend looking closely at the upcoming Coomera precinct which is well-positioned near the Westfield Town Centre and is set to become a hot spot for the industrial sector.