More than 2 million square metres of floorspace has been added to Brisbane’s industrial sector since 2019.  But it’s not enough.  And as the Brisbane 2032 Olympic and Paralympic Games approaches, hand-in-hand with skyrocketing south-east Queensland population growth, demand for industrial is going the same way—up, Savills head of research Katy Dean says.  “The Olympics puts Brisbane on the radar, raising its profile internationally and acting as a springboard for demand,” Dean says. And this growth is also attracting development capital.  “It’s a stable market and there is lots of capital sitting on the sideline waiting to get into those opportunities,” Dean says.  ▲ Savills head of research Katy Dean: Olympics a lasting economic driver for property. With industrial space requirements generally calculated at 4sq m per person, south-east Queensland needs 810,000sq m of additional space to meet demand by 2031.  “And that’s at the lower end of the scenario. At the high end, it’s more than 3 million square metres,” Dean says.  The question remains whether Queensland can keep pace with that level of demand, given that even with millions of square metres of extra floor space, vacancy rates declined to under 4 per cent by the end of 2024 from an earlier high of 6 per cent. But developers are optimistic and working smarter, not harder, to ensure its delivery. Land availability Property Council of Australia Queensland executive director Jess Caire says that the provision of infrastructure, especially in the run-up to the Olympics, is “critical”.  “Traditionally we have done a poor job co-ordinating infrastructure and planning for industrial development ... we must improve,” Caire says.  “This can be done by prioritising the funding of catalytic infrastructure to unlock industrial land to support local government infrastructure planning and being more strategic about how we co-ordinate infrastructure delivery with planning.”  ▲ Goodman Australia’s Redbank Motorway Estate, south-west of Brisbane’s CBD. Goodman general manager for Queensland Daniel Brekan says that although the Games puts a spotlight on the region, “the structural drivers for industrial demand are population growth and improving the customer’s supply chain networks”. “SEQ is one of the most highly constrained land markets in the country,” he says. “This constraint, together with strong demand from customers, will provide increased demand over the long term.”  Working with what we’ve got These land supply constraints can hold the industry back, Centennial head of property funds David Cupit says.  “The issue is that there really aren’t that many new land releases,” Cupit says. “There just isn’t that much near-city industrial land being released for future development.”  It means developers must get creative to deliver the floorspace needed in the run up to the Games and beyond. “Developers are turning to ... brown-to-green developments, buying large land holdings of out-of-date facilities, and either repurposing those facilities or demolishing them and rebuilding new facilities on that land close to town,” Cupit says.  ▲ Render of the revamp Centennial is undertaking at the Queensport Road site it bought for $10.5 million. Centennial invested in 33 Queensport Road, among others, a prime infill site at Murarrie where it is replacing two older buildings; and at Geebung where it is developing new warehousing on surplus land attached to old industrial buildings.  “You’ll see the continued emergence of conversions of older style facilities in great infill locations, [and that] will be where you’ll see capital try to take advantage,” Cupit says.  But one industrial innovation we’re unlikely to see in the region for now at least is multi-storey warehousing, Cupit says.  “Multi-storey doesn’t quite work in Queensland yet, because the additional construction costs outweigh the savings in the land value.  “At this stage, it only really works in south Sydney, where you’ve got land rates of $3000 to $4000 a metre versus $1000 per metre in Brisbane.  “Land rates will have to triple before it starts to make sense economically.” ▲ Centennial head of property funds David Cupit: Multi-storey doesn’t work in Queensland. Brekan says customer needs should come ahead of innovation, but the two dovetail.  “For Goodman, our customers’ needs are the major drivers for industrial development. Our customers are investing in technology, so they want warehouses that can provide opportunities for automation and mechanisation.” Attractive fundamentals  South-east Queensland industrial markets are impacted by the same issues facing other sectors, Caire says.  “[These include] high construction costs, a lack of serviced land, and a taxation regime which is not geared towards attracting investment,” Caire says.  But Cupit says that despite the challenges, continued demand for the likes of e-commerce is a major driver for industrial growth. “Then there is obviously an increased level of localised infrastructure related to infrastructure spend; that’s both government spending on standard infrastructure, so health and road networks, and then also the forthcoming Olympics-related spend,” Cupit says.  Brisbane industrial leasing volumes vs new industrial building completions 2014-2024 ▲ Source: Savills Research Rental growth rates are another highlight in part of the region ’ s markets, Cupit says.  “We see a distinct divergence between outer markets and inner-ring markets,” he says.  “We’re seeing a 10 to 14 per cent improvement in rental growth rates in the inner ring compared to the outer, and lower vacancy rates, which is why Centennial is maintaining its focus on the inner ring.” But rental growth easing elsewhere is a positive step towards increased market stability, says Cupit.  “If it kept running at the same pace it would have been unsustainable for tenants. So it’s a more balanced market,” he says.  ▲ Goodman general manager for Queensland Daniel Brekan: Automation and mechanisation. Dean says growth is still expected in the region, but not double-digit rental growth, and it remains more competitive than other markets. On Brisbane’s southside, she says, average net face rents are $155 per sq m, versus Sydney at $245 per square metre.  “This price point makes it incredibly competitive,” Dean says. And given the global market volatility, Australia generally and SEQ in particular is proving a solid bet, Cupit says. “We’re seeing some onshoring of warehousing at the moment due to some of the geopolitical concerns out there globally. “People are aware the economy is in good shape with demand drivers from an increasing population, but also increasing infrastructure spend.”  Capital   Jess Caire says that investors are increasingly looking towards Queensland in the “undersupplied” industrial sector.  “However, the challenge will be having the land and supply available to leverage this interest and addressing taxation barriers that may cause prospective capital to hesitate,” Caire says.    “Industrial investment is typically patient capital that is interested in the stable long-term investment that Queensland offers—we just need to ensure we have settings in place to facilitate this.”  ▲ Centennial’s Geebung industrial and logistics hub. However, the Olympics and all that it entails will be a lasting economic driver for the property market, Katy Dean says.  “What developers and investors should be watching closely is land availability, infrastructure delivery times and—on the planning side—zoning reforms.  “Investors who align early with those projects will benefit the most from the demand surge, as long as they and developers are watching and ready to act.”