Industrial property rent decines in Brisbane's secondary markets: HTW

Industrial property rent decines in Brisbane's secondary markets: HTW
Industrial property rent decines in Brisbane's secondary markets: HTW

Throughout 2015 there has been a substantial increase in transaction activity, says valuation firm Herron Todd White's recent month in review.

The report suggests however that this is by far more heavily weighted to prime assets and larger assets offering a strong WALE of five plus years.

"Buyer and market activity for investment properties with solid WALEs in the greater Brisbane area is very strong at present due to the low interest rate environment.

"This has resulted in firming yields for these prime assets over the past 18 months, evidenced in the above table."

However, the report does go on to add that there is increasing disparity between prime and secondary stock with strong yields for primary stock ranging between 7% and 8.5% and relatively soft yields for secondary stock ranging between 8.5% and 10%.

"The spike in demand for these more modern assets is driven largely by the limited supply being constructed which is a by-product of the hesitation to proceed without some certainty of future cash flow and hence the need for a pre-commitment.

"There has been an increase in leasing activity for prime industrial investment properties in the greater Brisbane area which is a positive sign in a somewhat volatile broader industrial market."

The report concludes by suggesting that the secondary stock is not as attractive with rents falling and vacancy rates increasing.

"Rents for prime industrial assets are ranging between $100 and $140 per square metre per annum net with secondary assets ranging between $60 and $95 per square metre per annum."

 

Joel Robinson

Joel Robinson

Joel Robinson is a property journalist based in Sydney. Joel has been writing about the residential real estate market for the last five years, specializing in market trends and the economics and finance behind buying and selling real estate.

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Industrial Commercial Rent

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