Bartercard office sale leads resurgent Gold Coast market
The Gold Coast office market is continuing to bounce back, with the sale of Bartercard’s national headquarters in the heart of the Southport CBD supporting promising new data.
The prominent commercial office building at 121 Scarborough St was sold by Abacus Diversified Income Fund II to Melbourne-based investment group Peak Equities, after a wide-ranging expressions of interest campaign.
It is the second acquisition on the Gold Coast this year by Peak Equities, after it bought the Sykes building at 183 Varsity Pde, Varsity Lakes, in February for just under $9 million.
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Knight Frank joint managing director, Gold Coast, Mark Witheriff says Southport has seen a significant amount of interest from investors over the last 12 months.
A new report by Herron Todd White confirms the Gold Coast office sector has strengthened as the year progressed, with vacancy levels stabilising and forecast to continue on a downward trend into 2016.
Bartercard House has some vacancy on the ground floor.
“Office rental have stabilised and incentive reduced, sale volumes have increased, yields firmed, and the sector has seen several sales of larger standalone office buildings,” the report says.
Herron Todd White says the best performed office precinct on the Gold Coast is at Broadbeach, with vacancy rates decreasing from 8.8% to 4.2%, representing a total change in occupied stock of 4.6%.
The Robina/Varsity Lakes office precinct also saw a slight reduction in its vacancy level to 8.6%, while rates still remain relatively high in the traditional office precincts of Southport, Bundall and Surfers Paradise, at 14%, 17.2% and 29.9% respectively.
Office rental have stabilised and incentive reduced, sale volumes have increased, yields firmed
Herron Todd White says Southport experienced a limited reduction over the 12-month comparison period, with the traditional areas marred by stock being generally older and slower to be absorbed.
But Knight Frank’s Tania Moore says while there is some vacancy on the ground floor at Bartercard House there has been strong interest in Southport across all business sectors.
Tenants including Senior Legal also call Bartercard House home.
Moore says she expects the office market in Southport to continue to tighten.
Southport’s recent designation as a Priority Development Area suggests there is also potential for a major redevelopment opportunity for a mixed use, retail/commercial and residential in the future.
The recently refurbished Bartercard House is situated on a 1656sqm site and features 3158sqm of office space, with a two-level basement for 83 cars.
Marketing agents Witheriff, James Branch and Moore say it offers a strong cash flow with a long-term tenant and a WALE of 5.94 years.
Bartercard occupies the second and third floor, secured on a long-term lease to the end of 2023. Other tenants include the real estate office of PRD Southport and the law firm Senior Legal.
