Flight to A-grade drives Brisbane industrial
Brisbane’s industrial sector is soaring, with an ongoing flight to quality seeing occupiers take advantage of relatively low prices to snap up A-grade warehouse space.
Knight Frank director of industrial – Queensland, Mark Clifford, says tenant demand in the 5,000sqm-plus category for A-grade warehouse space is up about 20% on last year.
“Businesses are streamlining their property strategies and realising cost benefits as well as operational efficiencies,” Clifford says.
“Several recent deals completed in Brisbane’s inner-western corridor reflect that tenants are choosing quality and efficiency over price, and they are willing to pay that little bit more.”
Clifford cites DEXUS Wholesale Property Fund’s DRIVE Industrial Estate in the suburb of Richlands, located about 16km south-west of the Brisbane CBD, where more than 12,000sqm of new, high-bay warehousing has been leased in the last four months at an average rate of $115 per square metre.
“Deals include Wheel Pro, who took 2357sqm, MTD, who took 3000sqm, and Iron Mountain, who took up 4200sqm,” Clifford says.
“The efficiencies gained in these types of properties often cancel out the slight dollar per square metre price advantage that many secondary properties offer.”
Similarly, the 9.7ha Uniplex Industrial Park, which is the last infill industrial land estate development in Carole Park, located about 19km south west of the Brisbane CBD, has had four lot sales in the last two months, prior to the development’s completion.
The lots, totalling 3.23ha, have sold for $6.1 million to a local developer, a transport business and local civil contractor, and are due to settle in September.
Colliers International’s Stewart Gamblin and John Slater are marketing the estate on behalf of Unison Projects, which purchased the englobo site off the State Government and received development approval for an industrial subdivision last year.
Gamblin says Uniplex is ideally located within the sought after Brisbane western corridor.
“Uniplex offers a rare opportunity for owners and lessees to position their business in an industrial precinct previously thought to be built out,” he says.
“We have very strong interest on the three remaining lots which range in size from 9,766sqm to 32,300sqm.”
Meanwhile, JLL’s Shaun Canniffe and Scott Nienhuis have sold a well-developed industrial property at 69 Cobalt St in Carole Park to owner-occupier Kenal Australia, following an offers to purchase campaign.
Knight Frank’s latest Brisbane Industrial Market Overview says occupier demand in Brisbane’s industrial sector remains focused on new accommodation, with only modest demand for existing stock due to the low rental differential between new and old space.
Knight Frank director of industrial Chris Wright says Brisbane has seen a significant increase in the number of owner-occupiers in the market.
“We have seen this particularly in the 5000sqm to 10,000sqm size range. With a lack of suitable existing buildings in these size ranges, we expect to see an increase in land transactions this year,” Wright says.
“Zoned industrial sites between one and two hectares are limited, so competition for these sites is set to increase.”