Southside Industrial Sales and Leasing trends

Western Corridor including Carole Park, Darra, Heathwood, Richlands,  Seventeen Mile Rocks, Sumner Park & Wacol

While sales and leasing enquiries in the Western Corridor have generally been down since the end of  the financial year, this trend is being (and will be) offset by the continuing benefits of upgrades to the Ipswich Motorway along with an increase in confidence.

As to the specific suburbs that make up this precinct:

Western CorridorSales activity in Carole Park has been slight, a situation soon to be enhanced by an increasing number of vendors willing to meet the market. This is particularly so in the Government owned Synergy Park, where land for private developers, ranging from 4,000m2 to 16,000m2, can be bought at very competitive prices. Meanwhile, a few leasing transactions  occurred, including the $150,600pa paid for a 2,008m2 office/warehouse at 10 Argon Street; the 103,320pa that rented an 861m2 space at 74 Mica Street, while $153,000pa took up a 1,090m2 freestander at 200 Cobalt Street. Prospective tenants will find a shortage of existing buildings over 3,000m2, a lack, it must be added, found in the whole Corridor. Spaces for  lease include a 1,559m2 unit at 2/140 Mica Street, which can be had for only $89/m2, while a 2,800m2 freestander at 146 Mica Street will be on the market later in the year for an expected $125/m2.

After sitting vacant for some time, a few smaller units in a Darra development were sold for more realistic prices once their owner realised he couldn’t aim for amounts paid at the top of the market, in 2007- 2008. One example is the $1.3 million achieved for a freestander at 20 Acanthus Street

The next six months will see a few properties brought onto the market, some especially attractive to investors. As to leasing, a representative deal was the $40,000pa paid for a 352m2 unit at 1/12 Sudbury Street

Heathwood’s sales market saw only a little movement due, in large part, to its tightly held nature, particularly on Stradbroke Street, where owners of larger investment properties tend to hold onto them while waiting for higher prices. Rental stock here is drying up, with only five properties available, ranging between 610m2 and 3,150m2

During the last six months many properties in Richlands came onto the market but haven’t sold because their prices were a bit too dear. On a more positive note, the near future should see the availability of hard to find smaller investment stock, which should be taken up quickly due to pent up demand and cashed up buyers

One of the most significant leasing deals in this suburb was the $698,418pa being paid for a 5,061m2 office/ warehouse at 24 Westlink Place. Other transactions include the $150,200 pa paid for an 1,800m2 space at 245 Orchard Road, while $56,160 pa was achieved for a 624m2 unit at 1/339 Archerfield Road. In the meantime, Dexus and Australand are leading the revival of spec building, the latter via a 15,000m2 space at Flint Street

While Seventeen Mile Rocks has seen the takeup of all freestanders and all but a few units in the Bluestone Circuit development, around 10 blocks of land remain unsold. The next six months should see developers put up buildings, particularly IDG, which already has a 1,600m2 freestander underway on just under an acre at 17 Bluestone Circuit.

Although leasing stock is starting to dry up in the Metrowest estate some older offerings between 178m2 and 1,1961m2 are still available in the suburb’s more long established parts.

During the last six months Sumner Park’s sales activity was quite slow, in part because it’s an older industrial area. For example, of the four small units at 11 Forge Close only one was taken up. The next six months should be much of the same, with many prospective purchasers still choosing to look at Seventeen Mile Rocks. On the other hand, this suburb has become attractive to entry level investors.

Leasing activity, while minimal, did see the takeup of a 2,274m2 space at Part 12 Forge Close, leaving a good range of small to medium units available, some with very attractive deals to be had..

Wacol saw six 1.6ha lots of Future Industry land come onto the market but little was bought and developed. Exceptions include the 20,000m2 Hitachi Transport building at Tile Street, a commitment which should encourage other large firms to take the plunge nearby, while on Viking Drive, Dexus is constructing a 5,800m2 freestander along with a space of 12,220m2. Both were originally to be D & Cs but are now being offered on spec. They should be available later in the year…a very positive sign.

The next six months will see more Future Industry land developed, still leaving plenty of allotments along Coulson and Tile Streets, mostly around 4 acres but open to amalgamation. Also during this period, the ex-Waco Kwikform building, a 2,950m2 space on 9,279m2 of land, will become available; Dexus is developing the new Nissan facility on Viking Drive, and the Primo building is nearing completion.

Meanwhile, redevelopment of the ex-Army barracks into a $1.5 billion business park is expected to start this year and provide additional office/industrial/retail space totaling 44ha GFA.


Logan Motorway Corridor comprising Beenleigh, Loganholme, Meadowbrook & Berrinba

Spaces along the Logan Motorway Corridor remain in high demand from potential tenants, leading to a rapidly diminishing supply of stock

Sales activity continues to be a mixed bag, with some suburbs not having many deals, while Loganholme has enjoyed an upward spike. Like its leasing counterpart, all suffer from a looming shortage of stock

More specifically:

Logan RegionBeenleigh saw a 300m2 freestander on 2,000m2 of Light/Medium zoned land recently come under contract, while a couple of investments are on the market with a yield of around 8%

Loganholme, at the strategically located crossroads of the M1 and Logan Motorways, is, as always, quite popular, having recently enjoyed a burst of sales activity despite the above noted scarcity…a situation made even tighter by the purchase of a couple of medium sized freestanders at Chetwyn Street, while a 975m2 office/warehouse is under offer at 3-7 Henry Street.

The next six months, however, is to see the completion of a quality 1,600m2 freestander at Burchill Street. This period should also continue to have high demand and stable prices and rates, with potential purchasers and tenants relying on existing supply since little else is to be built, save for those mentioned above

Popular Meadowbrook saw a number of leasing transactions, one a 2,019m2 freestander at 21 Nealdon Drive, which, at $108/m2 for a 20 year old building, offered a good representation of market rates. Another was a modern freestander at 80 Nestor Drive, which rented for $100/m2. In the meantime, a put and call option is in place at 60 Nealdon Drive, achieving $2.175 million

Berrinba saw limited sales activity despite some good available buildings, for example a 1,600m2 property (and the only one left) in the IDG Estate on Prospect Place. One that did get picked up was a 306m2 investment with a high office component a 3/50 Kelliher Street, on a yield of 9%

Once Council approval is given, Toll can be expected to start construction of a 43,663m2 depot for its NQX division on 134,317m2 of land, with a completion date early next year. In addition, Stoddart Manufacturing is putting up a 25,000m2 distribution centre on a 50,000m2 parcel, while ATCO is amalgamating three facilities it operates elsewhere into a 40,000m2 structure on 97,000m2 of land. The Stoddart project is also expected to come on line during the early part of 2013, while ATCO’s will be ready early 2014.

Crestmead, Browns Plains & Parkinson

Browns PlainsCrestmead had a relatively limited number of purchases, but what did occur included the $235/m2 achieved for a 2.26 ha parcel on Magnesium Drive. This site was on the market for some time until bought by a private investor who has it earmarked for Tiling Timber. Recently on the market are 19 lots of Light and Medium Industry land at Calcium Court in sizes from 2,000m2 to 1.02 ha, with prices under review. As to leasing, activity continues to be slow but stable.

Those needing to lease space in Parkinson should take a look at two units, totaling 2,676m2 at 1 and 2/90 Southlink Street, in the prestigious Southlink Industrial Estate. They can be rented individually or as one, a configuration made possible by internal joining roller doors. Meanwhile, a 2,270m2 space at 100 Southlink Street was taken up for $272,400pa on very long terms


Yatala Enterprise Area (YEA) comprising Yatala, Ormeau & Stapylton

YEAThe majority of purchases in the Yatala Enterprise Area (YEA) was for land, deals that included a 4.04 ha parcel at 167 Queens Hill Road East, which sold for $1.8 million, while a 2,500m2 allotment at Union Circuit was purchased at $236/m2. In addition, a new 1,500m2 freestander at Gassman Drive is under contract. Because of developer reluctance to build during the past few years, there will be a limited stock available for the near future. Hopefully this situation will change in line with the growing build up of demand unable to be satisfied

Leasing enquiry has remained constant throughout the YEA, for spaces of all sizes. Whereas tenants have been seeking more incentives from landlords, these offerings will surely dry up as stock disappears. Meanwhile, there has been a large upswing in Design & Construct requirements in every part of this precinct as the result of diminishing available space. Developers do have money to build on spec but want the security of having a strong tenant precommited long term

South M1 Corridor including Slacks Creek, Underwood, Woodridge & Springwood

M1 CorridorThe Slacks Creek, Underwood, Woodridge, Springwood precinct of the South M1 Corridor only contains secondary stock, as no new land has come on line for over a decade. What does exist includes quite a few unit options in the 200m2 to 800m2 range, with prices and rates dependent on quality. Need anything larger and you’ll have to look at the YEA or along the Logan Motorway Corridor. While in high demand, freestanders are hard to find and when they do become available are snapped up.

Meanwhile, sales activity has been solid in the smaller unit market, while demand has been strong for space above 500m2, unfortunately with only a limited supply.

Archerfield, Moorooka, Rocklea, Yeerongpilly & Acacia Ridge (Achievement, Success & Colebard Streets)

As to the sales and leasing market in Archerfield, Moorooka, Rocklea, Yeerongpilly and the pocket of Acacia Ridge comprising Achievement, Success and Colebard Streets:

ArcherfieldArcherfield saw some manufacturing related property become available for sale, in large part due to problems in that sector of the economy. This has resulted in a slight lowering of prices as vendors look to meet the market, sometimes via pressure from the banks. The next six months will be similar, making it easier for potential purchasers to consider their options. An example of this “trend” took place at 30 Rodwell Street, where a building was bought for $1.5 million, then resold for $1.1 million after having been on the market for a couple of years.

During the last six months there’s been an “uptick” in the number of spaces being leased, some after sitting for quite awhile. This activity will continue to be positive as quality tenants find they have a good selection of stock available at more affordable rates

Moorooka saw little change in sales activity, in that demand remained low and stock was in short supply. It’s hoped things will pick up a bit over the next six months, possibly the result of spinoff from the new Motorama facility on Ipswich Road.

Leasing activity has been quite good, witness the takeup of some small units along Michelin Street. Being a near city fringe suburb, there should be a strong run of rental enquiry from now until Christmas and not just motor trade related. Those looking will find an assortment of small to medium size spaces at the same rates as earlier in the year

While Rocklea’s sales market was still slightly effected by the flood stigma, in general potential purchasers started to put that issue behind them. Indeed, so much so there was a spike in activity, albeit some of it, ironically, coming from astute buyers picking up once “problematic” stock at significantly reduced prices. For example, four buildings on Randolph Street were bought for as much as 30% less then their previous valuation. It should be noted that these sat derelict before being refurbished and should be good investments if held long term.

Although transport users are still this suburb’s mainstay, there’s neither much stock nor enquiry for relevantly sized properties. And what is on the market has forced wners to reduce prices if they need to sell. The next six months should see the beginnings of a steady recovery.

The last six months saw some fantastic properties being leased, however there’s still some resistance for spaces that were once flooded. That being said, most prospective tenants believe this was a one off event, largely due to recent changes in dam protocols. Representative rentals include spaces from 100m2 to  8,000m2, at rates between $90/m2 to $110/m2. It’s expected these amounts will only increase by the CPI from now until the end of the year

Until recently Yeerongpilly was an above standard priced area that received the overflow of light manufacturers forced to relocate from other parts of the city fringe due to residential encroachment. With reduction of these external pressures, thanks to the GFC, demand eased as did prices. Fortunately, as these asking amounts stabilise, it’s expected that sales activity will slowly but surely increase

Meanwhile, there were some standout leasing deals combined with good units coming available, mainly smaller spaces along Curzon, Walker and Varley Streets as well as Tennyson Memorial Drive. Its strategic location between Moorooka and Chelmer, as well as proximity to the city fringe and CBD, means this leafy pocket will continue to attract tenants willing to pay premium rates

The older pocket of Acacia Ridge, generally comprising Achievement, Success and Colebard Streets, remains fairly tightly held, leaving vacant stock ranging 900m2 to 2,500m2 in particularly short supply…a situation offset by minimal demand and a weak market

On the other hand, the leasing market has been exceptionally good, both in terms of deals done and, finally, increased ability after a period of shortage. Examples of the latter include a 6,000m2+ warehouse at 42 Colebard Street East, while a 1,500m2 building at 42 Colebard Street West can be rented (or purchased). Rates over the last six months have been stable and should continue to be so during the next six.


Coopers Plains, Larapinta, Salisbury & Acacia Ridge

The precinct that comprises Coopers Plains, Larapinta, Salisbury and parts of Acacia Ridge saw a healthy dose of sales activity at competitive prices, while its leasing counterpart was stable in that as soon as a business vacated, this space was taken up, generally at rates from $110/m2 to $120/m2 if A-Grade and between $85/ m2 and $105/m2 for B Grade. Both sectors suffer from a shortage of stock and nothing new is expected to come on line at any time in the near future apart from some possible spec building in southern areas

Coopers Plains enjoyed reasonable sales activity, mainly for smaller units. Little will change during the next six months apart from stock starting to dry up because no smaller units were built over the last three years.

During the last half year Larapinta became the “flavour of the month” due to the fact that a number of major companies purchased there. Land is still under what it was originally marketed for when subdivisions were created pre 2007, meaning now is a good opportunity to buy at a very good price. For example, whereas now parcels can be found between $250/m2 and $300/m2, previously vendors were only achieving $300/m2 on average. Meanwhile, representative leasing activity saw a 782m2 unit taken up for $86,020pa, or  $110/m2, at 2/59 Distribution Street.

Salisbury, which had a bit more sales and leasing activity due to a lack of stock in other areas, is seeing its own shortage because of no new development. That being said, many growing companies, which once would have overlooked this suburb’s older style properties, are now finding them a reasonable and less costly alternative. A case in point was a 1,650m2 secondary space at 8/268 Evans Road, which was taken up for $148,500pa on a longer term, at $90/m2.

In the more modern part of Acacia Ridge, at and around Bradman Street and Beaudesert Road, there’s currently a marked lack of anything for sale between 1,000m2 and 2,000m2, a situation made worse by the purchase of a couple of properties in that size range. The next six months will eventually see most of its remaining stock dry up, leading to a further firming of prices, even slight increases

Significant leasing deals include the $100,000pa or $98/m2, paid for a 1,079m2 front space at L1/163-174 Ingram Road; the $84,480pa, or $110/m2, that rented a 766m2 unit at 1/68 Murdoch Circuit; the $101,640pa, or $105/m2, paid for an office/warehouse at B1/41 Bellrick Street, while an undisclosed amount picked up a 5,111m2 property at the front of 38 Peterkin Road.