Brisbane industrial property no longer the poor cousin

After a strong 2015, industrial property in Southeast Queensland is set to continue its ascent in 2016, as domestic and international investors look to take advantage of the yields available on the market.

According to Savill’s January 2016 Brisbane Industrial Briefing, in 2015 overall sales of industrial buildings in the Brisbane metropolitan area cracked the $1 billion mark*. This achievement was predominantly fuelled by foreign investors, who made up approximately 41% of all sales, and private investors, who contributed to around 21% of all sales.

Investors such as the Singapore-based distribution company, CouriersPlease, who made a $40 million investment into a Salisbury facility, and Motorama’s purchase of 127 Riawena Road, Salisbury, for $15 million, have added to the positive sentiment surrounding Brisbane industrial property in 2016. This interest from foreign investors looks like it will only continue to rise, spurred on by the low Australian dollar.

The deflated currency is also predicted to stimulate industrial production, which is forecast to increase 14 percent between June 2016 and June 2018. According to Deloitte Access Economics, Queensland annual GSP growth is expected to outpace other states by almost a full percentage point in 2015-16.

The region’s industrial and GSP growth can partly be attributed to the fact that it has not been affected by the mining downturn to the extent that other states have. “A common misconception is that the Brisbane market is heavily dependent on the mining sector whereas Brisbane has a much more diverse economy,” said Tony Crabb, Savills national head of research told the Courier Mail.

Colliers International’s Research and Forecast Report states that Brisbane industrial markets are “experiencing strong demand from domestic and international investors for investment grade industrial assets.”

Colliers International director Anthony White says demand for industrial property “will continue into 2016 with buyers being increasingly attracted to the long-term security that industrial properties can provide, particularly as volatility hits other asset classes.”

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*Approximate figure.

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