Transport and logistics dominate Brisbane industrial leasing: Ray White
Transport and logistic tenants dominate the plus 5,000 sqm industrial leasing market in Brisbane, making up nearly 40 percent of all leasing requirements, according to Ray White Commercial.
Leasing volumes in the more than 5,000 sqm market in Brisbane has reached approximately 500,000 sqm in the past two years, Ray White Commercial (Qld) associate director - Industrial Transactions, Dan Costello.
“Transport and logistic tenants dominate the need for large and modern spaces and this segment of the market is particularly active in the pre-lease market,” Costello said. “These tenants are looking to new, purpose built facilities on long lease terms.”
However, manufacturing is a falling segment of the market and now only represents seven per cent of all tenant take-up, and dominates the secondary sector of the market.
“Other consumer uses including automotive, construction and telecommunications collectively represent half of all of the leases with a mix towards prime and secondary assets,” he said.
In her Between the Lines Plus 5,000 sqm Brisbane Industrial Leasing Market report for March 2016 Ray White Commercial's head of Research, Vanessa Rader says the market has gone through a period of uncertainty over the last two years.
“While little speculative supply has been added to the market, the move from existing to new has resulted in an increased vacancy particularly in the secondary asset class,” she said.
“This has resulted in some compression in net face rents across all quality grades, while many larger owners have become more aggressive offering incentives and discounted face rents to secure longer lease terms. Incentives remain a growing concern in the Brisbane industrial market as they are now averaging between 10 to 15 percent.”
Rader said there have been small declines in face rents across most Brisbane regions with the south-east having the lowest average net rent of $99 per sqm.
“The south-west, north and south have reduced by 6.2 percent, 6.3 percent and 6.3 percent respectively with an average rent in the range between $100 per sqm and $102 per sqm,” she said.
“The Trade Coast continues to achieve the highest rent across the Brisbane metropolitan area due to access and quality of stock. This market has attracted a lesser reduction in rents, falling by 5.1 per cent over the last two years to currently average $107 per sqm.”
