Gold Coast commercial sales slide in 2023, but for all the right reasons
The Gold Coast's commercial property market has witnessed a noteworthy 39% decline in transactional activities in 2023 compared to the previous year, according to the latest data from Colliers. However, experts believe that this decline is attributable to a lack of high-quality stock on the market rather than an actual downturn.
Colliers Director Steven King highlighted that the buoyant sentiment on the Gold Coast, fueled by migration and infrastructure growth, is prompting institutional and private investors to retain their assets. This has resulted in a reduction in available stock and subsequently fewer transactions across retail, industrial, and office markets.
The breakdown of the commercial property transactions in 2023 is as follows:
Industrial Sector: Industrial sales led the way with total transactions reaching $346 million, up from $285 million in the previous year. The industrial market contributed to over half of the year's total sales by value.
Retail Sector: Retail sales amounted to $193 million, showing a decrease from $675 million in 2022. The decline is partly attributed to the absence of larger transactions that bolstered the retail sector in the previous year.
Office Sector: The tightly held office market, buoyed by record low vacancy rates, saw sales increase to $120 million from $103 million.
Of the 107 recorded transactions up until October 2023, only six surpassed $30 million, primarily in the industrial sector. The majority (72) were transactions below $5 million, driven by strong demand from cash-rich private investors. This buyer segment, less susceptible to interest rate fluctuations, has been instrumental in boosting sales in the lower price range.
While there has been a softening of yields by 75 to 100 basis points across all sectors due to continued uncertainty in the macroeconomic environment and rising interest rates, experts emphasize that this doesn't reflect diminished underlying demand for quality commercial and industrial assets on the Gold Coast. The market remains dynamic, with investors showcasing interest and confidence in the region.