Speculative supply and lease start post-completion
CBRE Queensland director Peter Turnbull said about 75 per cent of the speculative stock developed in Brisbane since 2013 had leases commenced within a year of completion.
But, Turnbull said, tight land supply had driven industrial land values up 3.5 per cent per annum during the past five years with large institutional investors land banking and “putting upward pressure on pricing”.
CBRE research indicated about 67ha of new serviced industrial land had entered the market since 2016, but the absorption rate had averaged about 95ha per year, indicating a supply issue into the future.
Online retail penetration in Australia is at 13.3 per cent of all retail expenditure, and Australia Post data suggested online retail grew almost 50 per cent in 2020 in Queensland.
CBRE research associate director of research Tom Broderick said Toowoomba and Mackay had contributed significantly to e-commerce growth in Queensland, which boosted Brisbane’s position as a major distribution hub for the state.
Broderick said there had been an increased focus on export of manufactured food exports in Queensland during the past decade and it would continue to drive the development of specialised manufacturing and cold storage facilities.
Cold storage facilities are attractive to investors in the current environment given their exposure to the non-discretionary retail sector, and tenants are more “sticky” due to the overheads of fit-outs.
The report indicated that while there was substantial development of speculative stock under way, it was forecast to continue as fund managers looked to increase their exposure to the booming industrial sector.
Brisbane’s M1 corridor has the lowest vacancy rate of industrial and logistics precincts across the southeast corner at just 0.2 per cent, which CBRE research suggests would encourage greater development in the area over the next 24 months.
Article Source: www.theurbandeveloper.com