New retail hotspots emerging in Gold Coast's southern suburbs

Tanaka Jabangwe, Knight Frank’s associate director retail leasing, said the southern Gold Coast was where the action was happening, with demand from retailers heating up.

“The retail strips in the southern Gold Coast market between Mermaid Beach through to Palm Beach are experiencing the lowest vacancy rates; however, this is partly due to a high level of demand from retailers versus the limited supply of quality stock,” he said.

Mr Jabangwe said the strong demand was partly due to the perceived affordability of rents compared with the historical retail precincts of Surfers Paradise and Broadbeach.

“In comparison to the traditional core retail precincts of Surfers Paradise and Broadbeach, suburban locale rental rates are circa 20 to 30 per cent less with the promise of a more consistent localised trade area that is not highly dependent on tourism spend,” he said.

However, Burleigh Heads was an anomaly, with higher rents common, mainly due to its popularity with food-and-beverage establishments, which generally had the capacity to pay a premium rent, he said.

According to the Australian Bureau of Statistics, Queensland had the highest net influx of new residents from other parts of the country – at 22,800 – in the year to June 2019. The Gold Coast was second to Brisbane as the favoured destination.

This influx is also underpinning an uplift in the Palm Beach retail market, according to Ray White Commercial, with the precinct increasing its service and food-related offerings.

“Occupancy levels have recorded sound results in this region with a vacancy of just 4.38 per cent,” Ray White’s head of research Vanessa Rader said.

“The retail mix for this area highlights the change in demands from consumers with service offerings representing the largest proportion of occupiers.”

She said traditional services such as banks were now being replaced by beauty-related businesses as well as gyms and other health-inspired retailers that cater to locals and visitors.

Ray White Commercial GC South sales and leasing agent Tara Imlach said that, over the past five years, new residential developments in Palm Beach had also been accompanied by new commercial properties.

“New apartments have provided new ground-floor retail accommodation, while other developments have seen the office stock levels increase, bringing a new divide in quality of accommodation for the commercial markets,” Ms Imlach said.

“Recent transactions have resulted in net face rents ranging from $450 per square metre to $600 per square metre, with smaller, modern facilities commanding a higher rate.

“This has not gone unnoticed by the investor market with sales during late 2019 achieving yields in the 5.85 per cent to 7 per cent range, depending on the quality and lease covenant.”

Mr Jabangwe said Broadbeach was also undergoing a resurgence of interest from lifestyle brands, mainly food and beverage retailers, given that shoppers spent more in Broadbeach per person than the Gold Coast average.

“Vacancy rates in this area have significantly dropped in comparison to 12 months ago with a wave of new quality establishments being introduced or already operational,” he said.

Mr Jabangwe said while there were some concerns about how the construction of the third stage of the light rail might impact on these precincts, in the long run, it was all positive.

“These areas should reap immense benefits as accessibility will increase, which would allow more northern-based locals to venture south to these lifestyle hubs, which has an indirect correlation to increased revenues,” he said.

“We foresee demand for retail across the southern market continuing throughout the year due to an increasing local population base with interstate migration, gentrification and development.”