Like the rest of Australia, there’s no doubt the Sunshine Coast commercial property market has been hit by COVID-19, particularly with higher vacancy rates and lower rents.
Here’s a short run-down based on various sources and research online:
Office: 2020 started positively, however since March, as a result of the virus, more people have been working from home which has led to more tenants wanting to downsize to save money and space. Co-working spaces have seen an increase in interest in the past few months, and there has been strong demand overall.
Leasing conditions are expected to remain precarious in the short term, however investors are still showing interest for longer-term property options.
Retail: sales have decreased as many property owners put a hold on selling, or buyers took a break from spending. On the other hand, leasing demand is said to have increased and there’s believed to be renewed confidence in the sector, particularly as a result of the government stimulus and lessor support.
The towns of Beerwah, Tewantin and Maleny have seen limited growth and limited vacancy, while older strips, such as Brisbane Road, Mooloolaba and Nicklin Way, Kawana, have seen fluctuating vacancy levels. According to reports in June, the hinterland commercial centres have seen less impact from COVID as the larger Sunshine Coast regions, and landlords have been working closely with tenants to offer rental rebates and try to help keep them in business. Leasing enquiries have remained active, and property owners are offering 3-6 months free rent as incentives to get people in. There’s also been increased demand for properties in the sub-$2 million range, however everyone generally remains cautious.
Industrial: the Sunshine Coast property market has been hit hard this year, with the bushfires and then COVID-19. As with all properties, the industrial market has seen a decrease in sales, however, demand for space has actually increased in many areas – predominantly as a result of increased online shopping. The more people shopping online, the more demand there is for logistics space and larger warehouses.
The Sunshine Coast industrial market has seen a number of smaller strata-units contracted in the past three months, 300m2 or smaller; and although demand has slowed, owner occupiers are still active.
At McGees Property Brisbane, we aim to stay abreast of the Sunshine Coast commercial property market into the future so we can keep you up to date on the state of the market. Stay tuned next month where we cover some of the major Sunshine Coast developments for 2020.