Sub 2,000 sqm Stock in High Demand in TradeCoast Region
Normally associated with large logistic users due to its proximity to the Port of Brisbane and Brisbane Airport, there has been strong demand in Brisbane’s TradeCoast precinct for sub 2,000 sqm industrial stock, Ray White Commercial research has found.
Ray White Commercial Head of Research, Vanessa Rader, said smaller business operators have been more active in the TradeCoast region, highlighting this growing owner-occupier and private investor sales market.
“Prime quality stock is in high demand for rent by many small businesses with a mix of tenant type spread across this region,” Ms Rader said in the Between the Lines – Industrial TradeCoast Region (sub 2,000 sqm) Overview June 2017.
“Users such as automotive, consumer, trade and construction all feature around this location, keeping rents up, while secondary assets face a greater challenge. Low barriers of entry with affordable lending have seen sales volumes rise over the last three years while investment returns continue to be compressed.”
Ray White Commercial TradeCoast Industrial Sales and Leasing Manager, Jared Doyle, said preliminary sales for the first five months of 2017 show transactions of $16.323 million with yield indications averaging 7.23 per cent.
“While this rate is down 37 basis points on the 2016 result, it is well aligned with the yield compression felt in many other investment markets including the larger industrial market across Brisbane,” he said.
“An example of some of our excellent sales results this year was in the Portlink complex in Lavarack Avenue at Eagle Farm near Brisbane Airport, with one tenanted warehouse/office unit selling for a record high rate per sqm for the development as well as a tight yield of 6.68 per cent.”
Ray White Commercial TradeCoast Sales and Leasing Executive, Jack Gwyn, said capital values in the region range from a low of $1500 per sqm in Mansfield to $2900 per sqm in Murrarie.
“Murrarie has held its values best given the concentration around two major commercial hubs,” he said. “This has resulted in good demand to both buy and lease dictating good returns and low vacancy rates.
“The regions of Eagle Farm, Hendra, Tingalpa and even Mansfield have seen some value impact due to the new ‘man cave’ storage facility phenomenon. These assets used for private use is highly price point driven and with their small size are affordable for private owners particularly given the current low interest rate environment.”