May 2015 – Brisbane Northside Industrial (sub $5 million market)

25 May, 2015 / Vanessa Rader and Dan Costello

Interest and activity in sub $5 million industrial assets has grown over the past three years across the Northside of Brisbane. A combination of low interest rates, SMSF’s and private investors looking to diversify together with owner occupiers looking to shelter from possible rising leasing costs has resulted in this strong uptick.

During the 2014 calendar year a total of $180.6 million was recorded in this sub $5 million price category, this represents 131 transactions. Volume of activity is well split across the regions to the north, however the greatest volume being in the inner precincts less than a 5km radius from the CBD where $60.4 million has changed hands with a high average sale price of $1.89 million. This a symptom of higher land values in this inner ring and more robust demand for space across small businesses which puts pressure on the leasing environment, encouraging more private investors into the market. The outer region (15km+ from CBD) is also the recipient of high levels of investment, aided by the lower price point with the average sale price $1.21 million. During 2014 the 15km+ market resulted in $50.90 million transacting up by 54.93% on 2013 levels in terms of value this increase demonstrates the desire to enter the market at a price point below the average Northside average of $1.38 million.

2014 has witnessed the highest number of sales recorded historically; during this period 131 transactions occurred, the bulk in the outer 15km+ region with 42 sales, followed by the inner (sub 5km) and 10–15km radius regions both recording 32 sales.

This represents a decline in transactional numbers for Inner down from 40 the prior year, similar interest in the 10–15km group fell from 39 during 2013, while the outer 15km+ region saw a substantial increase from 23 to 42 sales. During the first quarter of 2015 there has been 21 transactions take place in the region totalling $23.90 million, the majority of sales in the 5–10km radius with an average sale price of just $775,000 which strongly represents smaller industrial units. The larger value transactions have come from the Inner (less than 5km radius) where the average sale price achieved $1.36 million, not dissimilar the outer 15km+ precinct which has resulted in the same average sale price however being a symptom of a combination of strata product sub $700,000 together with larger development stock over $2 million.

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