Revamps required to keep warehouse owners in the game
Older and larger logistics centres in Brisbane’s competitive warehouse market are being forced to undergo extensive refurbishments in order to contend against competitively priced new builds in emerging areas.
Colliers International’s director of industrial Anthony White says there is an increasing trend for institutional owners to invest heavily in refurbishing their existing portfolios in order to increase their properties’ market relevance.
“These owners are looking to attract new tenants to their buildings following existing tenants vacating, sometimes after leases which are on a term of 20 years or more,” White says.
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According to Colliers research, over past year there has been about 91,000sqm of existing buildings of more than 10,000sqm in size leased, of which 70,000sqm were substantially refurbished by the owners.
“We believe this is only the beginning of a refurbishment cycle and that many owners will need to consider how their buildings function to suit modern tenants’ requirements,” White says.
The majority of warehouses leased in Brisbane over the past year have been refurbished.
“Efficient truck access, undercover loading areas and quality fire and building management systems will be demanded by tenants as the design and construct market offers brand new buildings at competitive rentals.”
Brisbane Airport Corporation is in the final stages of completing a substantial refurbishment of a 26,912sqm distribution centre at 51–57 Qantas Dr, Brisbane Airport.
As tenants demand more efficient buildings we will see increased activity in distribution centre refurbishments
“Following a 21,912sqm commitment by GPC Australia (Repco’s parent company), Brisbane Airport Corporation undertook a substantial refurbishment which included a full fire sprinkling upgrade, an office extension and refurbishment and an external cosmetic refurbishment,” White says.
“This strategy yielded immediate results, with national fit-out company Mills Display agreeing to lease the balance 5000sqm tenancy just prior to Christmas.”
Tenants are demanding more efficient buildings before taking up a lease.
Brisbane-based De Luca Construction and Development, which is working with Brisbane Airport Corporation on its project, agrees they are also seeing an increasing demand for warehouse and distribution centre refurbishments.
“We have seen repositioning strategies rewarded with some exceptional leasing outcomes over the past 18 months,” White says.
“As tenants demand more efficient buildings we will see increased activity in distribution centre refurbishments.”
Other examples of this trend include Charter Hall, which also recently completed a refurbishment on its 18,000sqm distribution centre at 180 Holt St, Pinkenba, which was previously occupied by NQX.
Goodman has also invested heavily in its existing assets at Hendra and Acacia Ridge, and Stockland has completed a substantial refurbishment of its 29,000sqm highly exposed distribution centre on the corner of Nudgee Rd and the East-West Arterial in Nudgee.
