Glimpse of recovery in Canberra's industrial property market: HTW Industrial

The Canberra industrial market had been stable prior to the election in May 2019, however there are glimpses of increased activity which suggest the start of a recovery cycle, according to the latest report from Herron Todd White (HTW).

The property valuation firm found commercial agents are reporting increased activity on the back of a stabilising residential market and improved consumer confidence.

The ACT government’s Four Year Indicative Industrial Land Release Program is based on the current level of demand for industrial land.

The program is intended to achieve a number of objectives, but in essence it is to increase the ACT government’s responsiveness to market changes by developing an inventory of land stock, where serviced industrial sites are available for immediate release.

Land will be available across new estates in Symonston (2020-21), Fyshwick and Majura Valley (Pialigo, 2021-22) as well as Hume.

The program aims to release 110,000 square metres over the next four years.

"Queanbeyan continues to provide a desirable option for owner-occupiers in the market, as increasing municipal rates in the ACT continue to discourage activity," the report said. 

"A Legislative Assembly committee is currently conducting a formal inquiry into the commercial rating system and has made numerous recommendations; the long-term effects from this are yet to be determined.

"Investors and owner occupiers are currently attracted to the small scale industrial market, particularly for superannuation purposes and also to have an asset that has potentially appreciating value and the ability to provide collateral for borrowing power.

"The outlook for the remainder of 2019 is for much of the same, namely growth and increasing activity on the back of a stable residential market and political climate.

"Industrial leasing demand is improving, however rents remain stable generally with a continued need for incentives.

"Further proposed rate cuts will have an impact on the market in the long term and some rental growth may be observed when tenant demand levels increase and sales activity begins to soften.

"The outlook for the Canberra and Queanbeyan industrial market is for increasing take-up levels over the next 12 months."