Brisbane Industrial Land Supply Dries Up In The South West

The prime south west corridor in Brisbane is experiencing shortage of industrial sites larger than five hectares with immediate access to the Logan, Ipswich and Gateway Motorways.

“We are now heading into single digit opportunities of available large lot land sites to develop,” Colliers International National Director of Industrial Matthew Frazer-Ryan said.

“This is leading to the increase in land values and driving occupier requirements further south to Yatala or further west to Ipswich, which is helping grow and develop these districts.”

According to Colliers International research, Brisbane industrial land values for 2.5 hectare serviced land lots have increased on average 16% over the last financial year, from $253 per square metre in 2015/16 to $294 per square metre in 2016/17.

“Occupiers and developers in these precincts are now planning up to 10 years ahead and looking for sites to build on that are situated adjacent to existing transport nodes or future road network upgrades," Mr Frazer-Ryan said.

“They are land banking to secure their future industrial footprint. Some of these occupiers that have less flexibility in choosing a location are also now starting to look at brownfield sites that provide short to medium term income, and that can become available for future redevelopment in lieu of the traditional land bank strategy.

“Limited stock of quality warehousing facilities has meant that on the leasing front we are experiencing a flight to quality with occupiers moving from older and less efficient facilities into modern A Grade facilities.

“Considering existing A Grade facilities are tightly held in this precinct, the demand for design and construct product will increase, ensuring those developers that have land banks leverage this benefit in the foreseeable future.

“Demand and take-up in the South and Logan Motorway corridor has been more subdued YTD, however ongoing negotiations for a series of new commitments are forecast to be completed in the coming quarter, and rebalance the take up across the southern market.”

Overall, the industrial market in Brisbane has experienced significant leasing activity in the first half of this year, particularly within the TradeCoast region with over 100,000 square metres of leasing transactions occurring.

Driving growth for industrial product in the Australia TradeCoast precinct is the significant investment in infrastructure projects underway including the duplication of the runway at Brisbane Airport and the upgrading of Kingsford Smith Drive which will help improve the productivity of the region.