Adelaide inner-north industrial market is leasing hotspot: Colliers International
Adelaide’s inner-northern industrial markets continue to be the most popular those business seeking warehouse space, accounting for almost 80% of the more than 200,000 square metres of industrial floor space leased in the first nine months of 2012 in the South Australian capital, according to Colliers International.
Prime net rents in this market currently range between $100 and $145 per square metre and secondary net rents between $65 and $90 per square metre.
Prime inner-northern industrial yields currently range between 7.75% and 8.5%, and secondary market yields between 8.5% and 9.5%
Major leasing deals include Interlloy signing a long-term lease for 1 William Circuit at Pooraka in Februrary. The 4,385-square-metre property had formerly been occupied by Bohler Uddeholm (Bohler Steel), which sold it late last year and July. ACI Glass leased a 32,000-square-metre warehouse at 15-23 Whicker Road, Gillman.
Australand has secured a pre-commitment to lease a new purpose-built 25,500-square-metre facility after acquiring the Electrolux 84,000-square-metre site at 19 Pope Street, Beverley, in an off-market transaction at the end of 2011. The lease is for 12 years at an estimated net rent of $87 per square metre. The building is expected to be completed next year.
According to Colliers International, there is around 45,000 square metres of industrial floor space currently under construction within Adelaide's industrial precincts, with expected completion dates ranging from the last quarter of 2012 to through 2013.
The report also reveals that rents are stable and prime market yields have stabilised between 8% to 8.5%.
The pre-lease market has remained active with close to 50,000 square metres pre-leased this year.
Recent pre-lease commitments include Cameron Interstate, Electrolux, Global Pumps Inc., Spotless Group and Australian Independent Glass.
The report reveals that year to date, the total value of Adelaide transactions was estimated to be $180 million, with almost 45% of the transactions occurring in the inner-northern precinct.
Predominant sales activity included the sale of a property at 404-450 Findon Road, Kidman Park, for $35.1 million. The sale price reflects an initial yield of 15.46% and is fully leased to Metcash Trading Limited.
In June, 16-20 Johansson Road, Wingfield, sold for $9.5 million on an initial yield of 11.6%.
A property at 9-13 Caribou Drive, Direk, sold for $9.2 million. The property is leased to Kimberly-Clark and has a market yield of 8.63%.
The report forecasts that Adelaide’s overall industrial performance will continue to climb over the next six months and tenant demand will also increase.
Incentives are forecast to remain stable, as are land values, but yields are forecast to either remain stable or decline.