Markets
THE PROPERTY DEVELOPMENT REVIEW
SOUTH EAST QUEENSLAND INDUSTRIAL LAND RACE
Unprecedented levels of infrastructure development underway in South-East Queensland due to significant population growth as well as the upcoming Brisbane 2032 Olympic Games is having a considerable flow on effect to the industrial sector.
witnessed robust rental growth due to consistently strong demand for industrial properties in the area. Secondary rents have shown slightly faster growth, increasing by 27 per cent over the year. Land values have also increased, with a 24 per cent increase between 2021 and 2022, with land in the Australia Trade Coast and Brisbane North continuing to command higher prices, averaging around $650/sqm. Land in Brisbane’s South, South West, and Yatala areas typically average $550/sqm for smaller blocks of land and larger sites of over 5 hectares falling within the $400/sqm to $500/sqm range. On the Sunshine Coast, industrial land supply is critically low with the majority of activity concentrated in Caloundra and Beerwah where land values are between $450/sqm and $600/sqm for smaller lots, and larger sites of over 1 hectare achieving rates of around $270/sqm to $450/sqm. “We are seeing large numbers of new interstate investor/ developer entrants to the market as South East Queensland land values are much lower than core New South Wales and Victoria industrial locations,” said David Brisk. South East Queensland is further going to benefit from the continued momentum and build-up towards the Brisbane 2032 Olympic and Paralympic Games with Federal and State Government investment in new infrastructure such as stadiums and public transport. An $89 billion infrastructure investment program by the Queensland Government is set to transform the state over the next decade. These projects, interstate migration, and supply shortages will continue to contribute to a strong South East Queensland industrial property market with no signs of slowing down in the foreseeable future.
The industrial occupier market is particularly tight, with continued demand for land and hardstand driving record breaking sales and leasing transactions, with no signs of slowing down. Despite headwinds in the broader economy and other asset classes, the industrial market will experience another year of record take up with Colliers forecasting 1,000,000 sqm of leasing transactions in the over 5,000 sqm size range which is on par with 2022 and 40 per cent above the 10-year average. “We’re continuing to see substantial occupier enquiry levels in the Brisbane industrial market which is holding the vacancy rate at all time lows around the 1 per cent mark,” according to Nick Evans. Colliers Queensland has transacted over $3.5 billion of industrial assets in the past 2 years alone including a recent over $17 million sale of a 28,380 sqm industrial site in Wacol on behalf of MADAD Investments. Other recent sales include an over $12 million sale of an 8,040 sqm office and distribution warehouse formerly used for Expo ’88 on behalf of Silverfin Capital Limited, a nearly $17 million sale of a 4.26ha site in the Yatala Enterprise Area sold to Brisbane Isuzu and over $15 million in sales at Coomera Springs Enterprise Park. Industrial land supply has remained constrained, but despite interest rate rises, occupier demand has remained robust. The industrial sector’s strong performance is currently underpinned by the occupier market, with rental growth currently at its highest level on record. Rental growth has remained elevated in South East Queensland with the gap in rental growth between Brisbane and southern capital cities continuing to narrow and southern occupiers are now considering Brisbane for their national distribution centres due to the strong fundamentals of population growth, infrastructure investment and more attractive rents. Over the past year, prime industrial rents in South East Queensland have increased on average by 23 per cent, with the Australia Trade Coast and Yatala regions experiencing the most substantial rises at 27 per cent. The Australia Trade Coast holds a strategic position in close proximity to both the Port of Brisbane and Brisbane Airport, making it a critical hub for the movement of goods to and from Queensland. This strategic importance has attracted a growing number of businesses keen on establishing their presence in the precinct, resulting in heightened business activity and expansion, subsequently leading to higher rental growth. Yatala has also
By Nick Evans & David Brisk Colliers Queensland Director Industrial
October / November 2023 – 11
Powered by FlippingBook