MCU14/0106 & OPW15/0001 Appendix C - Commercial Office Response

1          Office Accommodation
Issue – Office Accommodation:

       “The Commercial Needs Assessment estimates of floor space generally accord with a
       variety of data sources relating to the provision of ‘traditional’ commercial office space
       within the region. However, commercial office activities frequently occur outside of
       traditional commercial office environments and can influence on commercial office
       outcomes within a given region.”

Information Required:

Provide an indication of the extent of white collar employment likely to be accommodated in alternative or
non-traditional arrangements, such as home office type arrangements, or co-located with other operations
and the potential presence of office uses within the Noosaville Industrial Area.

Response:

While we agree with the Council’s statement that commercial office activities frequently occur outside of
traditional commercial office environments, we understand that this occurs mainly because of economic
and financial factors, such as rent and risk, rather than factors relating to the actual location of
commercial precincts.

We understand that for a typical office tenancy in Noosa of around 60 sq.m to 80 sq.m, the current rents
for A Grade office space in the centre zoned areas in Noosa are in the order of $300 to $350 per square
metre, while B Grade locations are slightly lower at $250 to $280 per square metre.

It is also important to note that from a development feasibility perspective, the current rental rates for A
Grade office space represent a 25%-30% reduction on the original leases struck. This discount does not
make A-Grade office development feasible as the development costs would exceed the property value.

In relation to lease terms, we understand that they have been reducing to periods of less than 3 years
which is generally reflective of the small scale and higher risk profiles of the businesses in Noosa.

Given the small size of the tenancies and the current rental rates, it would be more economically viable
and present a lower risk scenario for smaller white collar business that do not require an office front, to
work from home or relocate to pseudo-office space in more affordable “out-of-centre” areas, such as the
Noosa Industrial Area.




2   OFFICE ACCOMMODATION
                                                                                                                        URBIS
                                                                                NOOSA CIVIC - OFFICE REPORT - 6 MAY 2015.DOCX