Property Prophets III
The third annual Property Prophets luncheon saw our panel of ‘prophets’ (industry research leaders) return to their crystal balls to provide an outlook for the year ahead across the industrial, office, retail, and residential sectors. Peter Willington, Research Manager – Colliers International, outlined that the average project size in the industrial sector has increased significantly in recent years. Of these larger users, logistics and wholesale users continue to lead the composition of new leasing activity. Over 2016, Peter expects a fall in the effective rents for the Queensland market. Despite predicting a continued decline in Brisbane industrial purchasing activity, Peter reminded guests that industrial sector effective yields remain comparatively strong. Carol Hodgson, Director- Strategic Research – JLL, predicts an increase in vacancy for both prime and secondary office stock in the Brisbane CBD. Despite Carol’s expectation of stable demand for office space and decreased construction, significant new projects coming on to the market in 2016 will drive up the vacancy rate significantly. Prime CBD rents are expected to fall more sharply than current trends, while Carol sees yields remaining on their current more modest decline. Paul Day, Director – Research – QLD Savills Australia, foresees an increase in consumer confidence and retail trade turnover for the year ahead. Paul also believes the number of Queensland retail property sales in 2016 will continue to increase. Despite declining market yields, the asset class will remain a sought after investment. Trends such as on-line retail, omni-channel retail, pop-up outlets and stylising are predicted to continue to make an impact on the sector. Paul sees the push for more flexible trading hours remaining a live issue for the retail sector over the next twelve months. Tim Lawless, Research Director – RPData CoreLogic, pointed to the growth in Brisbane residential values over the last twelve months to predict a continued pattern of growth for the year ahead. Tim outlined that the volume of residential sales would also moderately increase. Despite the first year on year drop in residential rents, Tim predicted that rents should stabilise, but gross rental yields will continue to decline over 2016. By the end of the year, Tim foresees dwelling approvals declining from the current above-average levels.
Matt Cranston of the Australian Financial Review moderated the discussion and provided guests with the opportunity to pass their own judgment on the prophets’ predictions throughout lunch. The crowd largely accepting the wisdom of our industry research leaders. The Property Council would like to thank our prophets and Matt Cranston for their willingness to share their insights, and event sponsors Cedar Woods for their generous support.
Photos from the event can be found here.
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