The Industrial market shows a reasonable level of churn across Toowoomba. The most active segment of this market has been the smaller industrial unit market, which is popular to both buy and lease amongst various small businesses and private investors across the region.
This asset type is popular with local investors seeking a higher return compared to a traditional residential asset. The low cost of financing and uncertainty around residential vacancies has sparked some capital value movement and compression in investment yields over the last 12 months. Many investors from outside of the local area have moved up the risk curve venturing into more non-traditional markets.
The current Toowoomba industrial market has a high number of vacancies as at October 2017, with 236 assets actively marketed for lease totalling 173,357sqm of vacant space. The bulk of vacancies come in the smaller 0–500sqm size range which highlights the increased investment activity by private investors in this space. There are currently 117 active leasing listings in this size range with a total of 31,163sqm of vacant space, the average rent for this type of asset ranges between $85/sqm and $120/sqm. Low interest rates have also attracted owner occupiers to purchase these types of assets rather than rent due to their relative affordability which has limited the pool of tenants for this type of stock.