Brisbane’s Q3 industrial takeup below the 10-year average  | Real Estate Asia
, Australia

Brisbane’s Q3 industrial takeup below the 10-year average 

Takeup was at 84,400sqm in Q3.

According to a JLL report, gross take-up in the Brisbane industrial market contracted below the 10-year historical average (128,700 sqm) in the quarter, totalling 84,400 sqm, a figure 42% below the total in the previous quarter.

“The road transport sector accounted for the largest portion of gross take-up in the quarter, comprising 43% (25,700 sqm). Construction and warehousing/storage services also contributed 9,700 sqm to take-up in the quarter,” the report said.

Here’s more from JLL:

New stock delivery has significantly increased in Q3, compared to the previous quarter. Completion of new stock remained well above the 10-year historical average (78,400 sqm), totalling 248,100 sqm in the quarter. This uptick in completions has been supported by existing structural tailwinds.

JLL is currently tracking 382,500 sqm of stock under construction in the Brisbane industrial market, 14% of which has been pre-committed to. New supply over the next six months will be heavily weighted towards the southern precinct (42%).

Rents increase strongly, amid low vacancy

Increasing rents in the quarter can be attributed to reduced vacancy rates of industrial stock. The trade coast experienced most growth in prime rents (9.1% q-o-q), with limited supply in this well-connected precinct. The Northern precinct also saw notable growth of 6.8% q-o-q, while Southern industrial rents increased by 2.6% q-o-q.

Transaction volumes declined in the quarter by 55%, totalling AUD 76.6 million, a level well below the 10 year quarterly average of AUD 284 million. Transactions occurring in the last 12 months (AUD 728 million) have also declined below the yearly average of AUD 1,135 million.

Outlook: Industrial market to stay strong despite economic challenges

Economic uncertainty is expected in the near term. Despite this, demand for Brisbane industrial stock remains steady. Growth will likely be driven by low vacancy and competitive occupancy costs in contrast to Sydney industrial precincts. Nonetheless, with the rise in supply, incentives are expected to increase.

The development pipeline is forecasted to experience delays to project completions, resulting from escalating construction costs and labour shortages. For Brisbane, the supply pipeline is driven by land availability, hence the Southern precinct should experience greater activity.

Note: Brisbane Logistics & Industrial refers to Brisbane's industrial market (all grades).

 

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