South East Queensland – A Land of “Industrial” Opportunity

by admin-king | 9th October 2014

King & Co sees great financial benefits for property investors and owner occupiers acquiring industrial property in south east Queensland (SEQ) and are delighted to provide this ‘snap shot’ of why SEQ is a land of “industrial” opportunity.

SEQ is home to some 3.1 million people and countless small, medium and large businesses. Like the rest of Australia, there is a shift underway from traditional industries towards high tech, packaging, warehousing, transport and distribution business.  This transition will take many years to complete.

Combined with our great weather SEQ has a buoyant economy underpinned by solid population growth.  Is it any wonder why property groups such as Walker Corporation, Goodman, Australand, Investa, Dexus and Stockland have made significant investments in industrial property here?

Infrastructure
Significant and exciting infrastructure projects are either recently completed or underway and we would like to highlight a couple.

Successive state governments, in many cases with Commonwealth funding, have invested in SEQ’s road infrastructure to create a network that enables easy movement from industrial suburbs to the airport and port of Brisbane and ready access to the national system of highways.  The latest link in this network is Legacy Way, a tunnel linking the Ipswich and Logan Motorways and suburbs comprising the south-west corridor (Wacol, Richlands, Carole Park, Sumner, Darra) to the airport and port of Brisbane. Legacy Way is expected to be completed early 2015.

Toowoomba, a mere 129 kilometres west of Brisbane will benefit from the unique investment of the local Wagner family.  The West Brisbane Wellcamp Airport will provide a world class airport 15 minutes from Toowoomba.  Toowoomba is the gateway to the Darling Downs and the Surat Basin and with a population of around 140,000 it is one of Australia’s largest inland cities. Long term benefits from this investment and the development of the adjoining Welcamp Industrial Park are expected. 

Population growth and employment
Areas such as Ipswich,Logan,Moreton Bay, Redland and PineRivers are set for stunning growth. The Brisbane Long Term Infrastructure Plan 2012-2031 reports that in 2011 the population of the SEQ was approximately 3.1 million and forecasts anticipate this to explode to almost 4.4 million by 2031 – almost 42% in a mere 20 years. LoganCityfor example which is at the heart of our transport corridors, is expected to enjoy a population growth of almost 60% to 473,000 in the same period.

In 2011 there were some 1.7 million jobs in SEQ of which 1.07 million were in Brisbane.   By 2031 it is expected there will be a further 670,000 additional jobs in SEQ of which some 443,000 will be located in metropolitan Brisbane.  Many of these people will be housed in the cities surrounding Brisbane.  For example, the undeniable success that is Springfield Land Corporation’s master planned city, Greater Springfield,  is still growing.  New developments include the Perth based Amex Group’s ‘Providence’ covering some 670 hectares which is expected to house some 20,000  people in the next five years.   Similar activity is occurring across SEQ.

‘Future steady growth’
King & Co expects industrial property values in SEQ, and in particular Brisbaneto rise steadily over the short, medium and long term. There are some excellent development projects available or underway such as the Australia TradeCoast, the 16ha stage 1 ‘Metroplex at Westgate’ at Richlands/Wacol,  Goodman Group’s 62 hectare Redbank Motorway Estate & 50 hectare Rochdale Motorway Estate,  Investa’s 85 hectare ‘NewBase Enterprise Park’ at Brendale & 500 hectare Swanbank Enterprise Park. Conversely there is currently very limited supply of land under 4,000m2.

Whilst some of the major property groups have had an appetite for speculative development of larger buildings there is very little activity at the small to medium end. Only a few medium sized developers such as the Vanriet Group and IDG have been consistent performers over recent years. Consequently, there is a shortage of quality medium sized investment grade industrial properties and a trend towards rising rental rates.

This shortage of supply along with the prospects of continuing low interest rates, trends towards a lower currency exchange rate, and growing business confidence means that industrial property investment in SEQ can be expected to provide solid income growth and steadily increasing capital values.

Click to view As advertised in the Financial Review 10th Oct 2014

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