Brisbane Commercial & Industrial Market Update – October 2019

September 23, 2019

The Brisbane industrial leasing market has been quite healthy to date in 2019, with a 49% increase in leases year on year. A notable key trend in Q2 is that lessees are looking to upgrade their tenancies whilst the rental growth is relatively slow, but still providing a positive and modest growth. The Trade Coast precinct remains the most expensive area to lease, with the Southside being on average $15/sqm lower. Wholesale trade and Transport & Logistics were the two most dominantly demanded sectors for leasing activity, with the majority of transactions primarily concentrated (73%) in the Southern precinct.

Industrial land values remain relatively stable in Q2, however renewed demand may see an increase in those values in the short term. There is an increased demand for new investments and future developments due to the established estates being close to exhaustion.

2019 looks set to become a record year for investment activity in the industrial sector, with three $100 million+ transactional sales already having taken place in the calendar year to date. And it’s worth noting that the FY ending 30 June 2019 has been set as the second best year in a decade for industrial investments, with $1.13 billion in sales.

Yields continue to consolidate across the board, with prime yields continuing to contract with a range of 5.75%-6.25% and secondary yields remaining unchanged at 7.00%-8.50%.

In summary, our office is currently seeing a good amount of demand from buyers and tenants across the industrial market. The tail end of 2019 is likely to show much promise for landlords who are looking for results with their marketing campaigns.

Phil Levesque & John Andrew – FAL Property Group