The supply of fully serviced industrial land on the Gold Coast has fallen to an all-time low in 2023, pushing property prices to new highs amid sustained demand. 

New Colliers research has found that there has been an ‘extreme supply-demand imbalance’ across all industrial product types on the Gold Coast over the past year as land availability dries up. 

Colliers’ Director of Industrial Daniel Coburn says that despite rising interest rates, investors were as bullish as ever on the Gold Coast industrial market with low vacancy rates driving leasing deals and property sales. 

“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. This scarcity of land and built product in core precincts is leading to capital and rental growth across all precincts. 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.” 

Only 34 hectares of net land supply were available for purchase in Yatala, which equated to less than seven months of supply, given the average monthly take-up of around 5ha since the beginning of 2021. 

Despite this, land at Yatala remained the most affordable of the Gold Coast industrial precincts, ranging from $500 to $600 per sqm for smaller lots and $400 to $500 per square metre for lots of 1ha or more. 

This compared with prices of between $1,000 and $1,300 per sqm achieved for industrial land on the Gold Coast in areas outside of Yatala. 

According to Coburn, the Gold Coast industrial market is being led by demand from tenants and owner-occupiers which provides a firm foundation for future growth. 

Among the major transactions in November and December last year were 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; and 13 Northview Street, Mermaid Waters, which sold for $2.52 million to a local owner occupier. 

Population growth has emerged as a key factor for the continued strength of the Gold Coast industrial market, with the transport, logistics and e-commerce sectors showing the biggest demand for new space. 

But with few future land releases planned, the report warns that the Gold Coast is facing further price increases in core precincts as the supply of fully serviced industrial property hits an all-time low. 

While the Gold Coast recorded the highest growth in average industrial rents nationally in 2021 with an increase of 35%, prime rents in the city’s central and southern precincts rose at a more modest pace in 2022 – up by 3% to between $150/sqm and $170/sqm for 1,000sqm to 5,000sqm premises. 

However, rents in the Yatala Enterprise Area rose two to three times as fast, increasing between 5 and 10% to between $130/sqm and $150/sqm amid sustained demand. 

“Rising land values, construction costs, and general inflationary pressures are all exerting increased rental pressure on the newly built stock, as developers boost their prices to reflect these increases,” said Coburn. 

Despite the immediate supply challenges, Coburn remained optimistic that the Gold Coast market was set for further growth over the next decade.    

“With major southeast Queensland infrastructure projects under way and in the pipeline over the next five to 10 years, coupled with the record levels of migration to the Gold Coast, the outlook looks very positive for the market in the lead up to the 2032 Olympic Games,” he said.