Brisbane's industrial market continuing to yield good results

New research from Ray White Commercial shows the investment market continues to yield quality results across the 5,000 square metre plus industrial Brisbane sector.

High confidence coupled with an improvement in occupancy levels has ensured demand remains high.

Dan Costello from Ray White Commercial Queensland, says while the urgency seen in the investment market in 2017 may have subsided, capitalisation rates continue to remain compressed with prime average yields less than 7%.

“It’s encouraging to see high enquiry levels and an increase in sale of vacant sock to both investors wanting to reposition their assets, as well as owner occupiers,” Costello says.

Looking forward, findings concluded that across the Brisbane metropolitan area, there is over 575,000 square metres of potential industrial stock anticipated to enter the 5,000 square metre plus market in the next two years.

This is mostly demand led with little speculative supply expected to further hamper vacancy in the region.

The bulk of the development pipeline is located in ATC and the Southern precinct given its access to transport hubs.

As financing is becoming problematic to obtain, there is a notable decrease in sentiment for the smaller private investor market. However, confidence remains high for quality, institutional grade investment stock, Costello said.

“We’ve seen limited quality stock available in the market over the last 12 months, which has shifted focus and grown volume of vacant stock transactions.

“We expect this may slow over the next year with a greater shift back to property fundamentals by investors, however as occupier demand continues to improve reducing vacancies, rental growth in the short term is anticipated.”