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Sunshine Coast office vacancy remains constrained, Property Council report finds

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Vacancy rates for the Sunshine Coast office market are still the second lowest in the country, according to the latest results from the Property Council’s Office Market Report.

The office vacancy rate on the Sunshine Coast increased from 4 per cent in January 2023 to 5 per cent in January 2024, however only the “A-grade segment” of the market recorded positive demand.

The Property Council’s executive director for Queensland, Jen Williams, said that despite the overall vacancy rate increasing, office supply on the Sunshine Coast remained extremely constrained.

“Office vacancy rates on the Sunshine Coast are the lowest in Queensland and also the second lowest in Australia, eclipsed only by Hobart,” Ms Williams said.

“While there is some new supply set to come online in 2024, vacancy rates will remain compressed until at least 2026, when 50 First Avenue in the new Maroochydore city centre is completed.

“In the current high-cost environment, it is extremely challenging for new office projects to stack up financially and this is set to impact the supply of commercial office space right around South-East Queensland.”

Ms Williams said the latest results also revealed the big demand for “A-grade” commercial space.

“With new marquee office projects slated to be delivered in the city centre, it is likely that the transition from older assets to more premium ones will continue,” she said.

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Brendan Robins, a director at CBRE and chair of the Property Council’s Sunshine Coast committee, said it would remain challenging for businesses to find suitable office space on the Sunshine Coast over the coming years.

“Despite the increase in the overall vacancy rate it will remain hard for new businesses who are looking to get a foothold on the Sunshine Coast to find a space that suits their needs – especially if they are looking for a significant portion of space in the premium end of the market,” Mr Robins said.

“We do anticipate more sub-lease opportunities over the next few years as tenants move to quality accommodation.

“Maroochydore and Birtinya are our two main office precincts with limited opportunities in the 500sqm-plus range.”

The Sunshine Coast has one of the lowest office vacancy rates in the country.

The Property Council said office vacancies were calculated on whether a lease was in place for office space, not whether the tenant’s employees were occupying the space or working from home.

Vacancy on the Sunshine Coast office market had previously peaked at 21.8 per cent in 2019 before steadily dropping each year until 2023.

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