- Tight market squeezes out would-be Gold Coast businesses and investors
- Severe shortage, with less than seven months supply available in Yatala
- Gold Coast population growth identified as a key factor for industrial market strength
Surging demand and a growing population are just some factors driving the Gold Coast’s industrial market, according to the latest from Colliers.
Limited future supply is also feeding price growth, with some areas likely to run out of land before the year closes out.
A diverse and strong economy
The Gold Coast’s fundamentals are well ahead of both the state and the nation. Colliers’ report noted that the fifth largest Australian city has one of the fastest growing economies, expanding at 2.3%. This compares to 0.6% for Regional Queensland, 1.8% for the state, and 1.2% for Australia.
The city is also making major contributions to the Queensland economy, with an estimated gross regional product (GRP) of $39.24 billion, or 10.48% of state’s gross state product (GSP).
Among the top three sectors contributing to the Gold Coast economy, health, at nearly $3.7 billion; construction, at $2.7 billion; and manufacturing, at $2.5 billion, according to the Gold Coast Economic Outlook prepared by the Gold Coast City Council, as cited by Colliers.
Colliers’ report also highlighted the Gold Coast’s rapidly growing population. The population grew by 22.9% across the past decade, well above the state growth of 16.5%.
The population is also incredibly diverse, recorded at 34.81% being born overseas; Queensland’s proportion is 28.6%, and Australia 33.1%.
Also diverse, is the labour market. the report said the five largest employing industries in the region in 2022 were health care and social assistance (21.1%), accommodation and food services (15%), retail trade (14.9%), professional, scientific, and technical services (14%), and construction (13.4%).
The city will also benefit significantly from the upcoming 2032 Brisbane Olympic and Paralympic Games.
Less than 7 months of supply
The supply of fully serviced industrial land has fallen to an all-time low, pushing property prices to new highs amid sustained demand, according to Colliers’ report.
Despite the rising cash rate, investors remain bullish on the Gold Coast industrial market, with low vacancy rates driving leasing deals and property sales, said Director of Industrial Daniel Coburn.
“The industrial land shortage we have seen in recent years has become even more acute in 2023,” said Coburn.
“That’s great news for investors already in the market as yields and capital values are on the rise, but it’s become much more challenging for the many businesses looking to establish a base on the Gold Coast.”
Shortages are also driving businesses further out of core areas, but supply remains tight.
“This scarcity of land and built product in core precincts is leading to capital and rental growth across all precincts,” says Coburn.
“However, because development opportunities in core markets are becoming harder to find, businesses are increasingly moving further north of the city which has led to the rapid absorption of the limited supply of land in the Yatala Enterprise Area over the past two years.”
The Colliers report reveals that only 34 hectares of net land supply are available for purchase in Yatala, which equates to less than seven months of supply, given the average monthly take-up of around 5 hectares since the beginning of 2021.
While land remains scarce in Yatala, it also remains the most affordable on the Gold Coast. Colliers’ reported prices of between $500 and $600 per square metre for smaller lost, and $400 to $500 per square metre for lots larger than 1 hectare.
This compares with prices of between $1,000 and $1,300 per square metre achieved for industrial land on the Gold Coast in areas outside of Yatala.
Among the major transactions in November and December last year:
- 21 Dixon Street, Yatala, which sold for $7 million to a Melbourne-headquartered owner-occupier;
- 37 Central Drive, Burleigh Heads, which sold for $3.3 million to a local investor in an off-market deal, and
- 13 Northview Street, Mermaid Waters, which sold for $2.52 million to a local owner occupier.