Sales activity up in Brisbane industrial market

Sales activity up in Brisbane industrial marketDomestic institutional investors are helping to drive sales activity in the Brisbane industrial market, with demand building steadily over the past year, according to analysis by Knight Frank Research. A total of $6.55 million in transaction activity was recorded in the Brisbane industrial market in the 12 months to June 2014 (for sales over $5 million). The figure represents a 16 per cent increase on the $561.69 million recorded in the previous 12-month period. Investment demand also grew steadily in the past year, with unlisted domestic funds and syndicates being the dominant net buyers of Brisbane industrial assets, accounting for 41 per cent of all sales above $5 million by value. The analysis by Knight Frank Research shows that Australian real estate investment trusts (AREITs) have increased their presence in the industrial market. They now account for 15 per cent of purchases by value, helped significantly by GPT’s purchase of 18-28 Quarry Street, Stapylton, for $44.5 million and its acquisition of a per cent stake in the Metroplex at Westgate development for $36 million. There has also been a rise in the number of offshore investors moving into the market, with offshore purchases now accounting for 7 per cent of total transaction activity. Knight Frank Research says occupier demand remains uneven across the Brisbane industrial market. Demand continues to be skewed towards larger, new construction, with a steady stream of major commitments to either D&C or speculatively developed space already announced or imminent. The general leasing market remains subdued, however, with notably less demand for existing accommodation. Recently announced major commitments to new accommodation have included DB Schenker (31,400 sqm), Silk Logistics (19,900 sqm) and Northline (12,479 sqm). Several other 10,000-sqm-plus commitments to new builds are in the final stages of negotiation. In 2014, to date, completions have mostly been smaller owner-occupied facilities, with the two significant completions being the Mainfreight facility (23,5 sqm), Larapinta, and the Toll NQX facility (43,663 sqm), Berrinba.