City Fringe – Industrial Sales & Leasing trends

South city fringe including West End, South Brisbane, Woolloongabba, East Brisbane & Coorparoo
Rob Finlay 0411 747 165

The city-fringe suburbs of West End and South Brisbane have seen sales and leasing increase over the last six months, possibly because the area is regarded as a less expensive alternative to other city-fringe areas. The Go Between Bridge now also provides excellent access to the north, south and CBD.

There has been good interest from owner-occupiers for smaller office warehouses with some sales and leasing. Interest in larger industrial warehouse properties has slowed, but once again are becoming more attractive to developers looking to construct residential unit complexes. King & Co recently negotiated the sale of a 400 m2 freestanding building at 6 Greet Street, West End for $780 000.

Woolloongabba is also of interest to developers, although larger properties of 600+ m2 are slow to lease. Smaller office/warehouses in the area, for both sales and leasing, are taken up quickly, but there is a lack of stock. A 103 m2 first-level office space at 137 Logan Road, Woolloongabba was leased recently for $27 996 pa with a rate of $271/m2.

The sometimes-underrated inner suburbs of East Brisbane and Coorparoo boast excellent access to north and south arterials and close proximity to the CBD. For smaller units there is good quality stock, but a lack of supply. For 600 m2 to 2000 m2 properties there is some stock with good rates and leasing options available. A 332 m2 unit at Cambridge Street, Coorparoo was leased recently for $44 800 pa on a three-year term with options. The YWCA Queensland recently purchased 936 Stanley Street, East Brisbane  for $2.4 million as an investment, taking advantage of low interest rates.

North city fringe including Albion, Fortitude Valley, Newstead, Bowen Hills and Milton
Tracy James 0448 124 330

The major selling feature of the north city-fringe suburbs of Albion, Fortitude Valley, Newstead, Bowen Hills and Milton is their excellent access to the Brisbane CBD, the Inner City Bypass and the AirportlinkM7 to Brisbane Airport. When completed in 2015, The Legacy Way road tunnel will connect the Western Freeway at Toowong with the Inner City Bypass at Kelvin Grove.

There are a large number of residential developments going ahead in the area, including stage three of the Gasworks urban redevelopment, with construction currently underway. This influx of residential and commercial facilities will provide an excellent employment base for owner/occupied industrial properties.

With its inner-city location there has been no recent industrial development activity in the area and as these are tightly held suburbs, stock is frequently unavailable. However, there have been recent transactions for smaller commercial office units, such as Unit 17, 14 Argyle Street, Albion that sold for $385 550. 

Media reports of late have indicated that Brisbane office-vacancy rates have been rising for some time. Arguably, this has been driven by the flow-on effect of declining activity in the mining sector and the ongoing restructuring of Queensland Government departments. Recent analysis suggests that Brisbane city fringe office vacancy rates may be approaching 10.0%, resulting in increasing competition, declining leasing rates and increasing incentives. The impact of this is more pronounced in the city fringe secondary office sector where vacancy rates are believed to be approaching 12.2%; this indicates that there is somewhere in the vicinity of 77 000 m2 currently available.

There is a general expectation that the market will improve post-election. Furthermore, whilst there are projects under construction in Bowen Hills, Fortitude Valley and Newstead, a number of approved projects still require the necessary tenant commitment in order to begin construction, thus limiting new competition entering the market in the immediate future.