The Brisbane Industrial market performance has shown some mixed movements during the first half of 2017; while occupancy levels have seen little improvement resulting in a stable leasing environment, investors competing for investment grade stock have affected reduced yield rates.
Also, despite this limited growth in occupier demand, supply of new stock has continued at a steady pace with continued concern regarding the vacancy environment as larger tenants trade up into newly constructed assets leaving a large vacant secondary properties scattered across the market. Encouragingly however, is the greater volume of these vacant assets which have been sold during 2017, highlighting the move up the risk curve for many investors competing for stock.
There are currently 47 large (over 5,000sqm), active industrial projects in the development pipeline across the Brisbane metropolitan area. These account for 718,500sqm all of which are expected to be completed in the next two years. However, historically these projects have been strongly demand led resulting in many new developments deferred until suitable commitment is sourced. The DA Approved projects representing 388,750sqm across 26 projects are well split across the Brisbane Industrial market, with the Australian Trade Coast (ATC) and South representing approximately 150,000sqm and 133,000sqm respectively. A further 11 or close to 170,000sqm is still at DA Applied/Early Planning stages again well distributed across Brisbane, with South and Logan Motorway precincts representing the greatest share. Currently under construction are 11 projects or 160,199sqm which are certain to enter the market by the mid 2018; of which 89,627sqm in ATC and a further 53,191sqm in the South.