Industrial Market Update – Nov
Economically for the Reserve Bank of Australia it’s all about tackling rising inflation with predictions it could hit 8%. From a historically low cash rate of 0.10% since the 4th May 2022 Australians have had 7 rate increases rising the current cash rate to 2.85%, with predictions this could increase further.
There remains strong demand in sales and leasing, unprecedented low stock availability, limited land supply, softening yields, and sharp increases in rental rates. Many macro and micro economic factors including geopolitical tensions, spiraling inflation, and increases in interest rates are having major influences on where our economy is heading.
So, what are some of the factors that will sure up Brisbane’s industrial sector through 2023?
Where do I invest my money?: Industrial property has been the best performing commercial property sector in 2022 and is predicted to remain so in 2023. A volatile share market, confident lacking residential market, sees industrial as a secure investment vehicle and investor safe haven.
Rental Rate Increases: Yes, rising interest rates are causing yields to soften, however we are seeing rental rates increasing by as much as 18%. This is counteracting any yield increases, and the fact that many leases will be tied to inflation will only cement this.
E-Commerce: The rise of e-commerce will continue to significantly benefit the industrial sector providing greater demand for warehousing and distribution.
Lack of Stock: Strong buyer and leasing demand across the whole of the greater Brisbane region has fueled increases in land prices, building and rental rates. Developers are achieving large increases in rental and building rates.
Migration: Continued interstate migration into Queensland will help ensure the population growth will fuel demand for goods and services and the need for warehousing.
Should you have any queries, King and Co would be pleased to discuss or help with any of your industrial needs.
Robert Finlay
Director Sales & Leasing
M: 0411 747 165