Gold Coast to ride wave of Commonwealth Games momentum

GUEST OBSERVATION

The starter’s gun has fired on the countdown to the 2018 Commonwealth Games on Queensland’s Gold Coast and the positive impact of this major catalyst event is already being felt in the local commercial property market.

History shows that cities around the world have seen a pick-up in property activity up to four years out from global events such as the Commonwealth Games, and the Gold Coast will be no exception.

Indeed, the momentum of the approaching games is already evident and is likely to surpass that experienced by other host cities, given it is the first time a global event of this magnitude has been held in a regional Australian city.

The 2018 Commonwealth Games is the trigger for increased activity across the board for the Gold Coast commercial property market.

On the sales front, the Gold Coast is again back on the radar of domestic and overseas investors and the increasing weight of money entering the market will drive continued investment activity. This can be seen in the increase in enquiry for prime development sites, particularly in key locations such as Southport overlooking the water.

In terms of leasing, some national and international firms have already made the move into the Gold Coast and more are expected as global attention on the city increases in the lead up the Commonwealth Games. Vacancy rates are tightening and both commercial office and retail leasing enquiry has been strong in the opening moments of 2014, and is expected to continue to rise.

Importantly, the catalyst effects of the Commonwealth Games coincide with a period of renewed infrastructure activity on the Gold Coast, namely the light rail project and major new hospital and health developments.

All of this activity, and indeed much of the focus of the Commonwealth Games including the athletes’ village and new aquatic facilities, is centred on the Southport precinct which has been designated as a priority development area (PDA) by the Queensland state government.

This PDA status is crucial to the emergence of Southport as the true CBD of the Gold Coast, as opposed to the undisputed standing of nearby Surfers Paradise as the city’s tourism capital, and allows for development approval fast-tracking and innovation.

The Gold Coast is again back on the radar of domestic and overseas investors and the increasing weight of money entering the market will drive continued investment activity.

Southport is the business and administrative heart of the Gold Coast and its maturing into the city’s official CBD is long overdue. All regions need a recognisable CBD, just as much as capital cities do, to attract national and international firms, create a distinct employment hub and facilitate all the commercial, social and community benefits of agglomeration.

The Southport CBD is the key to unlocking the future economic sustainability of Gold Coast and positioning it to fully capitalise and build on the attention and flow-on benefits provided by the Commonwealth Games.

The Gold Coast is Queensland’s, and indeed Australia’s, premier tourist playground and that is not going to change. It is an exciting coastal city, blessed with surf, sand and good weather and has been the focus of tourist attention, both domestic and international, for decades.

By its very nature of being driven mainly by tourism, the region can be more prone to booms and busts than those cities with more diverse economies.

However, with a permanent population of circa 550,000 residents, the Gold Coast is now home to a growing number of diverse industries and services that stand it in good stead for the future.

This is clearly reflected in the evolving nature of the Gold Coast commercial office market, which is far more mature than in was in the 1990s as the scope of local businesses now spans much more than just pandering to the tourist market. There are now local and national firms across all industry sectors represented in the region, which are well positioned for sustainable future growth.

The 2018 Commonwealth Games is a once in a lifetime catalyst moment for the Gold Coast and the ongoing maturing of its local economy and commercial property market. Combined with a number of important infrastructure and planning initiatives centred around the Southport CBD, the games will deliver a great boost to a wide range of existing and new businesses in the region.

We are already seeing this starting to translate to increased investment and leasing activity, with more much to come over the next four years.

Paul Day is Savills Queensland head of research.