Brisbane industrial property a safe bet for investment
There is growing demand for industrial property in Brisbane, the latest report on the city's leasing market from Savills Research reveals.
Prime grade quality warehousing in particular has seen a rental growth of 2.5 per cent across the 12 months up to March this year, along with some significant pre-commitments last quarter, such as DB Schenker and Northline at Redbank and Kagan Logistics at Hemmant. There was also speculation on three more pre-commitments at the time of the report's writing.
Around 283,802sqm of industrial accommodation was leased in the Brisbane metropolitan region in this time period and $475 million of industrial property transactions reported. With industrial rents ranging between $100-$145/sqm, the yields on such commercial property investment were between 7.25 per cent and 8.5 per cent in the Queensland capital.
Leases sized 5,000-10,000sqm made up 28 per cent of the industrial leases, or 79,293sqm. This was the majority of leases, although leasing transactions of under 2000sqm constituted the biggest number at 47.
Better transportation prospects favour leasing
This leasing activity is concentrated in five particular precincts in the Brisbane area: TradeCoast, Southside, Northside, the Gold Coast and Logan Motorway Corridor and Ipswich. This is largely due to these precincts' proximity to high ways and major arterial roads, making them particularly attractive for businesses looking to ship products from warehouses.
The impending investment in Queensland's infrastructure is likely to make Brisbane and the surrounding area even more attractive to businesses. The record $13.4 billion of funds pledged in the budget will go toward fixing the Bruce Highway, upgrading the Gateway Motorways in the North and South, as well as creating an underpass on the Brisbane Urban Corridor and intersections at Wooloowin and Milton Road, just to name a few. This will cut down the time and money spent by local businesses on transport.
Opportunity in southside
Brisbane's southside also offers opportunities for business, with a large slice of the secondary grade industrial property available for lease mainly located in the area. The availability of industrial space is pushing rents lower, at around $60-$100/sqm, making it a prime location for those looking to lease such property.
Transport and logistics company made up the majority of leasers, with one-quarter of all activity. Manufacturing and engineering took 22 per cent, while construction, mining and agriculture represented 19 per cent.
At the present time, 268,229sqm is being planned or has already been approved in the southside and southwest regions.
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