Northside Industrial Sales and Leasing trends

Australia TradeCoast including Eagle Farm & Pinkenba

 

Australia TradCoast NorthThe Australia TradeCoast suburbs of Eagle Farm and Pinkenba continue to be highly sought after by prospective tenants due to their proximity to the City, Airport and major arterials…a popularity that has recently been bolstered by the completion of the M7 AirportLink tunnel, which provides a traffic light free route from the CBD through to the Brisbane International Airport. This project forms part of the $1 billion in infrastructure investment across the entire precinct over the past 5 years.

More specifically, this part of the Australia TradeCoast continues to see the constant takeup of existing stock, with little to no speculative development on the horizon. Despite these leasing options continuing to dry up, rates on all levels remains static, although A-Grade offerings continue to provide healthy enquiry, albeit with a indeterminable, and often long, vacancy period. Bucking this trend is the 150ha master-planned TradeCoast Central, which is situated on the  old airport site. It has recently secured several more large tenants, including Metcash, TNT and Harcourts, with construction to finish in the next few months. This is backed up by a large amount of surplus enquiry, which should ensure the estate continues to be a hive of activity.

Sales transactions have been predominately owner/occupier based, largely due to a lack of investment stock, an example being the $395,000 paid for a 178m2 unit at 13/212 Curtin Avenue. With confidence coming  back into the market, these deals achieved higher than anticipated results. Purchasers have looked out for buildings with an upside or refurbishment potential.

Northern Corridor including Banyo, Geebung, Virginia, Northgate & Zillmere

Northern CorridorAlthough sales activity on Brisbane’s popular Northern Corridor, which includes Banyo, Geebung, Virginia, Northgate and Zillmere, was limited by an ever increasing lack of stock, what had been purchased tended to be by smaller owner/occupiers, with value for money being the main underlying factor.

Meanwhile, investments have been achieving anywhere around 8% for small offerings, and 8%-9% for their larger counterparts, an example of the latter being the $3.1 million that bought a 2,079m2 Banyo tenancy at 22 Crockford Street. As might be expected, the key factors in these deals are yield, quality of property, quality of tenant and favourable terms. There are investors with cash but are only looking at optimum returns.

Leasing enquiry has proven sporadic across all size ranges largely due to the lack of stock and low levels of confidence. Following the recent take up of freestanding properties in the 1,300m2-1,900m2 size range, there is now a very short supply of freestanding buildings in this size. Similarly, there are very few freestanding spaces over 4,000m2 currently available, with tenants forced to look further afield. Rental rates, both asking and achieved, have remained static, with Land Tax being recovered in nearly all leases negotiated by King & Co. It should be noted that  when Land Tax is recoverable as part of the outgoings, it softens the net rental rate that is achieved as all astute tenants will consider gross rent payable when looking for a new premises.

With the recent completion of the M7 AirportLink tunnel, these northern industrial areas will become even more highly sought after due to reduced travel times  which are provided by exit/on ramps at Nudgee Road, Nundah; Sandgate Road, Clayfield and Gympie Road, Lutwyche. Whether this trend will continue once the toll fare is implemented, and indeed increased to circa  $5, remains to be seen.

Outher North Brendale

 

Outer North BrendaleBrendale, which was once considered “too far away” from the CBD to be regarded as a serious option, has finally come into its own. In fact what was once an area only taken up by businesses unable to find vacancies in Brisbane’s more popular and expensive northside industrial suburbs, is now one of Southeast Queensland’s fastest growing industrial precincts.

Indeed potential purchasers and tenants now say they want to locate here specifically, a rethink largely due to road improvements from there to the Gateway plus the attraction of state of the art offerings like the 85ha New Base Enterprise Park. They also have liked its proximity to their nearby clients as well as those in adjacent industrial areas of Narangba, North Lakes and Lawnton.

While activity in Brendale historically involved smaller to medium users, it has increasingly provided itself as a hub for the very large, a primary example being ALDI’s 40ha distribution centre.

Jack van Riet’s Pine Rivers Office Park, which has seen the sale of five of its eight tenancies in Building 3, with the remaining under contract at sizes from 64m2 to 170m2. In addition, the 1,102m2 Building 4 was purchased, while two tenancies out of three in Building 6 are under contract and leased. The latter were 199m2 and 233m2, leaving a 727m2 space still on the market, for lease or sale as an investment.

Similarly, Building 5, which comprises 1,168m2 of AGrade corporate style office over two levels, features fantastic exposure, outstanding car parking and great natural light…a must see for owner/occupiers and investors alike.

Meanwhile, there will remain some vacant land for development in the New Base Enterprise Park, at sizes ranging from 2,000m2+ to 3,000m2+, as well as some acre blocks here and here…parcels that will, of course, see no construction until the numbers add up.

Northwest precinct including Newmarket, Windsor, Stafford & Kelvin Grove

 

Northwest PrecinctNewmarket, with its tightly held nature, saw many more leases than sales. An example of the former includes the $210/m2 paid for a 282m2 unit at 4/8 Finsbury Street. As to the latter, there was the purchase of a 500m2 office at 40 Finsbury Street, while a receiver saw the takeup of a development property at 24 Finsbury Street. Meanwhile, a freestanding 600m2 office/warehouse at 22 Finsbury Street remains the only larger option in the area.

Leasing activity in Windsor, while not particularly strong, outpaced sales. An example of the former was the takeup of a 280m2 industrial unit at 2/84 Newmarket Road, for $160/m2, while some office space was rented at Lyons Terrace and Lutwyche Road.

Stafford has seen a bit of activity since the first of the year, most of it on the leasing side of things due to its sales stock remaining very tightly held. Examples include the rental of two office/warehouse units in a complex at 87 Webster Road.

The same sales to leasing trend can be seen in Kelvin Grove, though a 251m2 unit at 62 Bishop Street sold for $2,629/m2. A unit complex going up at Bishop Street is expected to bring interest from purchasers and tenants alike, as it will provide much needed space in popular sizes from 186m2 to 629m2.