'We're offering value': Sun is shining on Brisbane's industrial market
Brisbane’s industrial market is booming, and these conditions are expected to continue for some time yet, says JLL’s senior director of industrial in Queensland Gary Hyland.
This year there have been three big sales in the city of more than $100 million – at Eagle Farm, leased to Brisbane City Council, in Parkinson, leased to Coles and in Crestmead, leased to Metcash – and investment sales in Queensland are now accounting for 32 per cent of the total nationally.
“Last year, it was 18 per cent which was good, but this year the market is starting to boom,” Mr Hyland said. “We’ve seen strong yields, with prime yields in the 5 per cent range, take-ups have been over 500,000 square metres and we’ve seen land-value increases in some markets of 20 per cent.
“We’re offering value compared to Sydney and Melbourne and we’re seeing institutional investors start to land bank.”
He puts this all down to Queensland’s strong population growth and all the large infrastructure projects underway, such as the Cross River Rail and duplication of the airport runway.
“We’re also now starting to see the effects of e-commerce coming through to the market,” he said. “We expect this growth to continue.”
Two of those big three industrial investment transactions are at the Berrinba industrial precinct, with high-profile occupiers committing to more than 81,000 square metres across five major deals in the past three months.
“Now that the $500 million Logan Enhancement Project has been finalised, it’s improved access into the precinct and helped occupiers to manage and new tenants are more willing to go there,” said Matthew Frazer-Ryan, national director of industrial at Colliers International.
“Owners who are currently active in Berrinba and have development land available include Frasers Property, GPT, Charter Hall, Logos and ESR. If the activity from major occupiers continues, with demand high and land supply tight, the 35 hectares still available is likely to be taken up in the next two years. We have a very optimistic view for the future.”
A new report from independent property experts m3property found that land rates were up by as much as 21 per cent over the past 12 months, with strong owner-occupier design-and-construct activity, especially in e-commerce logistics.
Investment sales are predicted to beat last year’s.
Population growth, e-commerce and infrastructure projects had been key market drivers, said m3property’s Queensland director of research Casey Robinson.
“Brisbane’s industrial sector is experiencing boom-like conditions,” she said. “All indications are that the market will continue to perform strongly over the next 12 months as population growth and infrastructure projects drive even greater demand for new buildings.”
She reports there were 1092 industrial buildings approved in Queensland in the year to May – up 7.3 per cent on the previous year.
