Eastside Industrial Sales and Leasing Trends

Eastern Corridor including Bulimba, Morningside, Murarrie, Hemmant, Tingalpa, Lytton, Wynnum & Mansfield

HemmantBulimba saw the sale of a number of vacant GI sites, a case in point being the purchase of four adjacent blocks on Barramul Street…deals that highlight this tightly held suburb’s lack of stock. During the next six months, however, some industrial/commercial properties should come onto the market in sizes from 400m2 to 1,600m2. The smaller end of this assortment will be the  industrial properties that are of particular interest to owner/occupiers, many of whom should be willing to pay premium prices to locate here. Meanwhile, leasing deals have been few and far between due to a minimal amount of stock.

Over the last half year, the sale of investment units constituted the majority of activity in Morningside’s industrial market, one example being the 9% yield achieved for a tenanted property on Breene Place. The next six months should see the availability of a few smaller units along this suburb’s bread and butter streets of Riverside Place and Steele Place, albeit at higher yields, indicating a reduction in prices. In other words,while purchasers are pressing for bargains, it’s becoming necessary for vendors to meet the market.

As to this suburb’s leasing market it, once again, is suffering from a lack of industrial stock, but what does exist includes a 812m2 freestander at 48 Taylor Street; a 661m2 unit at 2/35 Steele Place as well a few small office/warehouses scattered about. Most of these are expected to be  taken up during the next six months, making this shortage even more critical. While rates have remained stable, it’s expected they will rise once confidence returns to the market, but primarily for smaller units

Murarrie has seen little sales activity, with most deals taking place in the Riverside Place complex, one to an investor, the other a vacant unit of around 200m2. It’s expected a few more units will be coming onto the market during the rest of the year. Owners of standard office/ warehouses are achieving prices between $2,300/m2 and $2,400/m2

Those looking to lease will find this suburb offers the greatest spread of office and office/warehouse stock in the Australia TradeCoast, albeit not great in numbers overall.

Unfortunately for lessors, but a boon to prospective tenants, large spaces with with a very high office component are expected to be in relative abundance partly due to the State Government’s job reductions. The result is that many owners will be increasingly forced to meet the market, whereas the alternative is to watch their spaces sit unrented for quite a while. One example of this rate softness is a quality space at 4/57 Miller Street, which was originally listed at $250/m2 but is now going for $195/ m2. Meanwhile, hard to find office/warehouses with a high proportion of warehouse have been and will be taken up

Leasing transactions over the last six months include Edward Dunlop’s take-up of a 7,500m2 space at the corner of Borthwick Avenue and Archimedes Place; just over 1,000m2 of space at 31 Archimedes Place; an ex-Reece Plumbing space of just over 2,000m2 at 15 Terrace Place, while tenants in part of 43 Metroplex Avenue just renewed their option, leaving 1,783m2 of high quality ground floor A-Grade office still available at $320/ m2 gross pa plus GST, which is of very good value. In addition, the development at 93 Rivergate Place, saw most of its units slowly but surely taken up since the beginning of the year, while three vacancies at 333 Queensport Road, which came on line at the same time at Rivergate Place, are expected to be taken up during the next six months due to their high quality finish. As hinted at above, the next six months will see even more competition between owners of large spaces with a high office component, complete with incentives and/or negotiable rates starting at $130/m2, while smaller office/ warehouses will be regularly taken up for around $120/m2.

Port MotorwayHemmant saw some sales activity, a standout deal being for the 12,600m2 One Steel tenanted building at 46-76 Gosport Street, probably the most substantial transaction in the area for some time. Meanwhile, a large parcel of FI land in Lytton Road is on the market, while about 9,000m2 is still available at Aquarium Street and expected to be bought soon for around $300/m2

This suburb remains lacking in large properties for lease, with one of the few over 7,000m2 being at 45 Aquarium Avenue. Similarly, there’s only some spaces available between 2,000m2 and 3,000m2, a handful in the 1,000m2 to 1,500m2 range, while there’s not many small vacancies. Although there’s significant need for larger spaces, most of what’s available are for short term. The next six months should see stagnant enquiry due to weak demand, but, again, as soon as confidence picks up you’ll start to find reduced incentives combined with rate rises

Tingalpa has seen limited sales activity, with deals taking place being small units on Proprietary Street, which were picked up for between $1,800/m2 and $2,000/m2. Another sale includes the $4.3 million paid for a 3,700m2 investment property on 6,300m2 of land on Ingleston Road

Meanwhile, there’s been some properties for sale on Container and Proprietary Streets, albeit at prices a bit too high for them to be readily taken up

There have been a few properties of good value rented at, for example, 39 Propriety Street, which includes the approximately $95/m2 paid for a 1,367m2 refurbished freestander. Meanwhile, a couple of good units of around 700m2-800m2,and ranging from $120/m2 to $135/m2, can be found at 27 and 31 Millenium Place, while, nearby, a couple of new developments are offering spaces with high class medium sized office/warehouse for $138/m2. Also nearby, one can find two 491m2 units going for $140/m2. Although there continues to be little demand, they should go quickly as soon as confidence picks up

Lytton has seen only a small amount of sales activity, though the completion of Port Connect is expected to have a significantly positive impact on demand and, potentially rates, particularly for land on Export Street and thereabouts. Transactions that have occurred over the last six months in include a property on 73 Export Street and part of a unit on Trade Street. Prices during this period have mainly levelled off and are expected to remain the same through the rest of the year.

Although Wynnum has only a minimal number of industrial properties for sale and, consequently, saw no deals, there are commercial properties available, which are in high demand and ready to be purchased

Mansfield has seen a great deal of sales activity, with deals including a few units on Secam Street. For those needing land there’s some slowly moving parcels available between 2,000m2 and 3,000m2 as owners try to meet the market. Despite this, the suburbs’s popularity means the asking amount of $350/m2 to $400/m2 is at least $50/m2 more than in other areas

While always tightly held, Mansfield does have a few good properties for lease, albeit without a large amount of demand. That being said, its expected 80% of the vacant stock here will be taken up during the next six months.

Stock on the market, or soon to be, includes five properties at 140 Wecker Road; a 377m2 tenancy at Dividend Street; a couple of of good 800m2 freestanders at Secam and Devlan Streets, while a few smaller spaces and a couple of freestanders are ready for occupancy elsewhere