The retail sector at the southern end of the Gold Coast is tipped to soar when the next stage of the city’s light rail project is completed.
The federal government last week announced an extra $157 million for stage three of the light rail network, which will see trams extend from Broadbeach South to Burleigh Heads. This adds to the $351 million that the state government has promised for the next stage and $92 million from the council. Work is expected to begin straight away.
Stage one was completed in July 2014, from Gold Coast University Hospital to Broadbeach South. Stage two was a 7.3-kilometre extension from the hospital to Helensvale Station in the northern Gold Coast and opened in December 2018.
Knight Frank associate director retail leasing Tanaka Jabangwe said the new light rail extension would encourage more tourists to venture south from the traditional retail precincts of Surfers Paradise and Broadbeach.
Disruption from construction of the project was likely to be less pronounced than the first stage in particular, given the lower density of retail in the southern Gold Coast region, he said.
“The stage 3A extension of the light rail will be a vital piece of infrastructure for the Gold Coast as it will connect heavy rail from Helensvale Station to the precincts of Southport, Surfers Paradise and Broadbeach, and all the way south through to Burleigh Heads,” Mr Jabangwe said.
“Ease of access across the city will generate economic growth for retail businesses in the southern Gold Coast catchment.”
He said local retailers would be able to claim a bigger slice of the estimated $5 billion spend that comes from nearly 13 million domestic and international tourists to the Gold Coast each year.
One of the big winners from the project is expected to be Burleigh Heads, according to Herron Todd White valuer Ryan Kohler.
He said the suburb’s retail sector was currently performing well because of strong local patronage but was likely to strengthen further following the project’s completion.
Mr Kohler said local retailers should be positive about the extension, but they might expect some disruption during construction.
“The light rail will galvanise the long-term relevance of these areas, making access more convenient for those from further afield and will also encourage tourists to venture further south,” he said.
“From a town-planning perspective, it is not unreasonable to expect there will also be some long-term befits as well, as council may be supportive of higher density development around the future stations.”
Brodie Millwood, general manager of popular Burleigh Heads eatery Justin Lane, said the light rail was a positive for the retail sector, but he had concerns about the impact of construction on local businesses.
“The Gold Coast is growing up, there’s a huge number of people moving here. We need a public transport system that can deal with this. This is a step in the right direction,” Mr Millwood said.
“The major concern prior to completion is the impact that the construction will have. For us, at least, I believe that the construction is on the other side of the road, so potentially we may be protected from its negative impacts a little.”
JLL Australia retail investments senior director Jacob Swan said the Gold Coast light rail project had generally helped to increase foot traffic as well as drive new retail openings along its corridor.
He said more tourists and international students as well as events and festivals had been coming to the Gold Coast following the launch of the project.
“The dedicated Gold Coast light rail corridor has been a catalyst for development, with the ‘light rail growth corridor’ driving growth in capital values and higher levels of redevelopment activity,” Mr Swan said.
“Transport infrastructure projects can have a very positive impact on retail real estate values by improving connectivity and access for consumers.
“It typically spurs investment and development for surrounding property and drives a revitalisation of an area.”
Government Bans High-Rise Development at The Spit
All future high-rise developments along The Spit will be restricted to a three-storey limit following community backlash against the masterplan.
More than 23,000 pieces of feedback were submitted during an 18-month masterplanning process, prompting the state government to change regulations for the area.
Originally The Spit’s masterplan for an “Ocean Park” included turning 140-hectares into light rail stations, super-yacht berths, and a proposal for an ocean cruise ship terminal.
While The Spit masterplan was drafted, ASX-listed developer Sunland withdrew an application for a proposed $600 million residential project on the site which included two 44-storey towers.
Last month Sunland put the 3.9-hectare Mariner’s Cove retail village and marina precinct on the market.
Minister for Planning Cameron Dick said the changes were made because The Spit had an unsurpassed natural beauty that the Gold Coast community was rightly passionate about.
“The message was clear: the community broadly supported a three-storey height limit being imposed,” he said.
“The new regulation delivers on our commitment to support the community’s expectation for low-rise development on The Spit.”
Amendments were made to the Planning Regulation 2017 to prohibit development over three-storeys or 15 metres.
“The height limit will apply to buildings and structures within the building height control area, including Sea World, Sheraton Mirage and all land south towards Southport Yacht Club,” Dick said.
“Outdoor rides within Sea World will be exempt from the height limit, however, new buildings in the theme park will have to adhere to the three-storey limit.
“This regulation change will ensure future development integrates with the existing landscape and maintains the prominence of The Spit’s natural values.”
Gold Coast Waterways Authority chief executive Hal Morris said they would be collaborating on the implementation of the masterplan.
“The waters and foreshores around The Spit are a real asset, so it’s important the connection between the land and water is maintained,” he said.
City of Gold Coast mayor Tom Tate welcomed the news and said council’s $35 million investment for transport and access upgrades along The Spit would also improve the visitor experience for locals and tourists alike.
“Maintaining the height limit will ensure the natural character and charm of The Spit continues in line with community expectations,” he said.
Youth Homeless Centre in Southport Under Way
Work on a new $13 million Youth Foyer for young people at risk of homelessness on the Gold Coast has turned the first sod.
The Queensland government purchased the site for $2.6 million in 2017, with plans for completion of the Southport-based project originally slated by the end of this year.
The centre, at North and High Street, will be managed by Gold Coast Youth Service in partnership with Horizon Housing Company, and provide accommodation for vulnerable young people aged 16 to 25 years.
“So, rather than worrying about where you’re going to sleep or where your next meal is coming from, you can study and work hard to create a brighter future,” member for Gaven Meaghan Scanlon said.
Each young person living in the Youth Foyer would need to be in employment, education or training to be eligible to live at the centre.
Scanlon said they will also pay 25 per cent of their income in rent.
The development will include 40 self-contained apartments with 24-hour on-site supervision and support for the young tenants.
“We are working with the Gold Coast community to build something that meets the expectations and needs of not just future residents, but the local community who will welcome them in,” Housing and Public Works Minister Mick de Brenni said.
“What’s clear is that this community is crying out for more social and affordable housing.”
This project is expected to employ 600 tradies including 60 apprentices.
Bureaucratic stroke of pen boosts Perth, Gold Coast
Why should property investors care that Perth and the Gold Coast are now considered “regional” towns instead of “metro” cities?
They should care because the change could have a significant impact on the real estate markets in those two cities, creating both opportunities and risks for investors. Here, I will explain why.
We all know that immigration is one of the reasons Australia’s economy has kept growing year after year, for the past 27 years. A provocative professor at the University of Sydney claims that Australia’s “economy is addicted to immigration” because —without the constant growth in population— our economy actually would have gone into recession several times over the past three decades.
Saving the country from recession isn’t enough anymore, however. The federal government wants immigrants to do more. That’s why it’s passed its regional immigration plan, which allocates 25,000 visas to immigrants who are willing to live for three years in regional Australia. After that, they can qualify for permanent residency.
The government billed the plan as a way to boost hardscrabble Australian bush towns.
Now, the government has decided that both Perth and the Gold Coast qualify as “regional” under the regional migration program. While that may be bad news for smaller, dustier towns, for the two cities it is excellent news. It means that they can benefit from thousands of new immigrants, the jobs they help create, the university fees they pay, and the money they invest in housing.
The new regional designation could be the factor that helps many students, workers, and investors from China decide to move to these two cities. It won’t mean more transactions tomorrow. Over the next 12 to 24 months, however, this change could add several thousand additional sales to the two markets.
A 10% TO 20% INCREASE IN TRANSACTION VOLUME?
These following numbers are an example of how it could play out. In Perth last year, there were about 26,000 sales. An additional 3,000 sales in a year would be more than a 10 per cent increase in annual transactions. An extra 10% in transaction volume would help put a floor under prices and help stimulate new construction.
On the Gold Coast this year, there will probably be about 15,000 transactions. At that pace, an additional 3,000 sales would mean an increase of about 20% in transactions. That would have a similar impact as in Perth.
The reclassification sounds like bureaucratic mumbo jumbo, but it has real-life impact. It was subject to a lot of behind-the-scenes lobbying and arm-twisting. This change could mean thousands of new residents coming to these cities and buying property, attending university, or starting businesses. It’s an economic gold mine for Perth and the Gold Coast.
There will now be a total of 25,000 visas for foreigners willing to live in regional areas. With their new “regional” classification, the Gold Coast and Perth have become (with Adelaide) the locations by far most likely to attract those immigrants.
The educational institutions, job markets, infrastructure, and lifestyle in the cities makes smaller regional destinations look less appealing by comparison. Regional areas like Dubbo or Geelong have a lot going for them and can provide excellent opportunities to new migrants. But the Gold Coast, Perth, and Adelaide are more prominent and by most calculations offer better prospects.
WHAT DOES IT MEAN FOR INVESTORS?
The change will also give the Gold Coast and Perth a boost in the battle to displace Melbourne and Sydney as the top destinations for Chinese migrants, students, and property buyers.
Both cities are struggling to increase the share of foreigners they attract. Their retailers want more residents, their universities want more students, and their developers want more property buyers.
If I were a property investor in the Gold Coast or Perth today, this new development would reassure me. Population growth has been the primary driver of price growth in Australia over the past several decades. With the regional migration program, Perth and the Gold Coast stand to see their population growth increase above present rates. Investors who can ride that growth to profits should do very well.
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