Industrial Market

The outcome of the Federal election giving Labor a majority government will provide greater certainty on policy stability.

The Brisbane Industrial property sector is tipped to remain buoyant for the remainder of 2022. There remains unprecedented demand, lack of stock, tight yields, limited land supply and room for rental growth.

Many macro and micro economic factors including geopolitical tensions, spiralling inflation and rising interest rates, are having a major influence on where our economy is heading. So, what are some of the factors that will ensure industrial property will remain buoyant going forward?

  • E-Commerce: The rise of e-commerce will continue to significantly benefit the industrial sector providing greater demand for warehousing and distribution.
  • Investor Safe Haven: Industrial property has been and is predicted to be the highest performing sector in commercial real estate. It’s perceived as a secure investment vehicle given the geopolitical tensions and volatile share market.
  • Manufacturing: There’s a renewed push for Australia to be more self-reliant with government policies set to support medical manufacturing and value adding funds for our raw materials and forestry.
  • Interest Rates: The RBA is predicted to lift the cash rate in 2022 to at least 1 per cent (from 0.1 per cent) and then 1.5 per cent in 2023. Should this occur, interest rates are still historically extremely low and industrial property will still provide a better net return compared with most other investments.
  • Inflation: The central forecast for 2022 is for headline inflation of around 6 per cent.
  • Rental Growth: Inflationary pressure, soaring land prices, increased building costs
    and a major lack of stock will ensure rising rental rates.
  • Migration: Interstate migration is forecast to increase from 0.3 per cent in 2021-2022 to 1.4 per cent by 2024-2025. Population growth will fuel demand for goods and services and the need for warehousing.
  • Suring up our supply chain: Many companies have been caught out in 2021 being able to source enough stock to supply their customers. Companies are doing their upmost to secure stock going forward, increasing demand for warehousing.

Should you have any queries, King and Co would be pleased to discuss or help with any of your industrial property needs.

Robert Finlay
Director Sales & Leasing

June 2022

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