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Brisbane industrial research forecast report   second half 2012
 

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    Brisbane industrial research forecast report   second half 2012 Brisbane industrial research forecast report second half 2012 Document Transcript

    • second HALF 2012 | industrialResearch & Forecast ReportBrisbane industrial Demand Broadens Out As New Stock Levels Struggle After the strong influence that the mining and resource sector had on the Brisbane industrial sales and leasing market during the first half, demand for industrial space has become more broadly based during the second half. The current take up of space currently reflects the diverse nature of the Queensland economy. During the half, demand was sourced from logistics, wholesaling, manufacturing and services businesses as well as mining and resource firms. The take up of spaceAEL Holdings purchased this facility at 55 Blanck (2,000m2 and above) was relatively evenly spread throughout the Brisbane market. Leasing volumesStreet Yatala in July 2012 have however eased since the first half from 220,000m2 to 87,000m2. While this seems well down, there were some substantial pre-commitments in the first half which boosted that result. Notably pre-commitment activity temporarily stalled in the second half. Investment activity for built product worth in excess of $5 million rose during the second half of 2012. While in the six months to March 2012 there were 14 transactions to total over $147 million,Market Indicators Forecast - 6 months during the six months to September 2012, there were 15 transactions that totalled $206 million. Of these, 4 sales were in excess of $20 million. Overall Performance Like the leasing markets, interest for properties was relatively evenly spread across the regions with New Supply four sales occurring in the Australia TradeCoast and Southside and Outer South and three sales in each of the Northside and Outer North and Outer South West industrial precincts. One other sale Tenant Demand was recorded in the Yatala Enterprise Area. Incentives Brisbane Industrial Market Indicators Face Rents Average Net Average Average Average Market Average Land Region Grade Face Rents Capital Value Incentives Yield* Values** Capital Values ($/m² pa) ($/m² pa) Low High Low High Low High Low High Low High Yields Prime $110 $120 3% 10% $1,200 $1,600 8.00% 8.75% $275 $375 ATC Land values Secondary $80 $110 5% 15% $950 $1,150 8.75% 9.50% Prime $110 $120 3% 5% $1,200 $1,600 8.00% 8.75% $300 $350 North Secondary $60 $90 5% 15% $950 $1,150 9.50% 10.50% Prime $110 $115 3% 10% $1,250 $1,450 8.50% 9.25% $220 $250 OuterKey Highlights North Secondary $75 $95 5% 15% $950 $1,050 9.00% 10.00%• There were 15 investment transactions over Prime $95 $115 3% 10% $1,300 $1,500 7.75% 8.50% $250 $300 South $5 million to total $206 million Secondary $65 $95 10% 20% $950 $1,000 9.00% 10.00%• Demand for space broadened out to include Prime $100 $120 3% 10% $1,300 $1,500 7.75% 8.50% $230 $250 more traditional users Outer South Secondary $60 $100 10% 20% $950 $1,050 9.25% 10.00%• Another period of very little new speculative Outer South Prime $100 $120 3% 10% $1,300 $1,500 8.00% 8.75% $225 $250 stock West Secondary $60 $100 10% 20% $900 $1,100 9.25% 10.00% Prime $105 $115 3% 10% $1,250 $1,450 8.25% 9.00% $175 $250 Yatala Secondary $70 $100 10% 20% $900 $1,100 9.00% 10.00% *Equivalent Reversionary Yield ** 1 hectare lots Data correct as of Q3 2012 Source: Colliers International Researchwww.colliers.com.au/research
    • research & forecast report | second HALF 2012 | industrial | brisbane Economic Update Solid National Economic Growth The June Quarter 2012 ABS Gross Domestic Product (GDP) data, showed in seasonally adjusted terms, GDP increased 0.6% during Q2 2012. Although slower than the strong result of 1.4% in Q1 2012, through-the-year GDP growth was a solid 3.7%. Deloitte Access Economics expect annual GDP growth to be 3.0% in 2012-13 and to rise to 3.4% in 2013-14 before easing to 3.3% in 2014-15. Unemployment Rate Steady As Total Employment Falls The unemployment rate remains steady at 5.3% (trend) as unemployment rose to 645,600. Total Employment decreased to 11,506,900. Consumer Prices Edge Up The latest inflation data from the Australian Bureau of Statistics (ABS) shows that annual headline inflation rose 1.4% in the September quarter 2012, compared with a rise of 0.5% in the June quarter 2012. This led to rise of 2% in through the year inflation to the September quarter 2012, compared with a rise of 1.2% through the year to the June quarter 2012. Inflation remains within the RBA’s target range of 2% to 3%. Interest Rates steady Enough evidence showing that the national economy is growing at around trend without excessive inflationary pressures convinced the RBA Board to keep the official cash rate at 3.25% in November. The Bank pointed out that further effects of actions already taken to ease monetary policy can be expected over time. The Australian Dollar After fluctuating around parity with the $US over the first half of 2012, the recent round of quantitative easing (QE3) announced by the US Federal Reserve has been accompanied by trade in the Australian Dollar at between $US1.03 and $US1.04 in recent weeks. brisbane industrial markets Nudgee Outer North Zillmere Virginia Banyo Northside Geebung Fisherman Islands Gympie Road Australia TradeCoast Northgate Lytton Hendra Murarrie Brisbane Eagle Farm CBD 30km 20km 10km Hemmant Tingalpa Morningside Cannon Hill Rocklea y rwa Moto Sumner Darra Southside way Gate Bundambar ay w Acacia Ridge tor Mo ch wi Ips Carole Park Ipswich Larapinta Loga n Mo Beenleigh ay Outer South torw ay rw Mot o West Brown Plains m ha ing nn Cu Heathwood Outer South Yatala Colliers International | p. 2
    • research & forecast report | second HALF 2012 | industrial | brisbaneKey Market Indicatorsstate gsp vs gdp Australian GDP and queensland gsp, annual change (%)• Deloitte Access Economics expect annual Forecast growth in Queensland’s GSP to be 5.6% in 6.0% 2011-12 and 5.7% in 2012-13. Spending on 5.0% resource sector engineering projects will continue to drive much of this growth as the 4.0% (Annual Growth, %) Queensland economic growth rate is forecast 3.0% to remain stronger than the national average over coming years 2.0% 1.0% 0.0% 2011-12 2012-13 2013-14 2014-15 QLD GSP Australian GDP Source: Deloitte / Access Economics / Colliers International Researchbrisbane industrial market Brisbane Industrial Development Pipelinedevelopment pipeline• Interms of the Brisbane industrial market development pipeline, there is approximately 140,000 164,000m2 of new industrial warehouse or distribution centre stock (over 5,000m2) 120,000 Floorspace (m2) which is in the development pipeline and in 100,000 the following stages: contract let; site 80,000 preparation in progress; construction; or 60,000 more than halfway through but not 40,000 completed). 20,000 0 Development Approval Contract Let Site Preparation in Progress Construction More Than Half Way Through But Not Yet Completed Source: Cordells / Colliers International ResearchContainerised Trade Port of brisbane imports and exports• The number of twenty foot equivalents, 500,000 (teu’s) for imports and exports (net of 450,000 transshipment and empty containers) in 400,000 2011-12, was 449,665 imported and 314,134 350,000 exported teu’s. In terms of monthly averages, (Number of TEUs) 300,000 both imports and exports are growing which 250,000 supports demand for large warehouses and 200,000 distribution centre floorspace in the Brisbane 150,000 market. 100,000 50,000 0 2007-08 2008-09 2009-10 2010-11 2011-12 Imports Exports Source: Port of Brisbane / Colliers International Research Colliers International | p. 3
    • research & forecast report | second HALF 2012 | industrial | brisbane Australia TradeCoast RENTS HOLD SALES REFELECT DIVERSE NATURE • Following a very strong amount of leasing OF DEMAND activity during the second half of 2011, • Interest in the Australia TradeCoast has been leasing in the North side suburbs of Eagle consistent into the second half while recent Farm and Pinkenba and the South side purchases reflect the diversity of business suburbs of Morningside, Colmslie, located in this transport infrastructure rich Queensport, Murarrie, Hemmant, Lytton and precinct. In the over $5 million category, aBrisbane based property syndicator Sentinelpurchased 46-58 Gosport Street, Hemmant Fisherman Islands has become steadier. The modern office warehouse leased mainly to area remains as Brisbane’s key industrial the Reject Shop at 175 Eagle Farm Road, area due to the combination of significant Pinkenba was purchased by the Flower port, road and rail infrastructure which Property Group for $12.55 million. Listed facilitates excellent access to local, national property trust Charter Hall purchased a and global markets. 48,100m2 site in Hemmant which is used as • Demand over the period stemmed from a container park. The property features heavy broad base of tenants including firms duty hardstand and is leased to Tyne engaged in logistics, manufacturing and Container Services. Brisbane based services. Significant leases were signed by syndicate Sentinel invested in another lighting manufacturer and distributor Gerrard Hemmant industrial property. Sentinel No 5 Lighting, steel manufacturer OneSteel which Pty Ltd purchased 46-58 Gosport Street secured the largest lease during the half at from OneSteel Trading Pty Ltd in a sale and 12,860m2 and logistics firms Thales leaseback transaction. Australia. Toll Energy also signed a lease at • Fidelis Investments Ltd purchased its first Hemmant for an office /warehouse with industrial property when it bought 37 3,400m2 floorspace. Eagleview Place in Eagle Farm for $7.2 • Unlike previous periods where demand has million. The property features 5,335 m2 of been relatively widespread throughout the floorspace and accommodates the VideoPro Australia TradeCoast, significant leases were Group on a ten year lease. only entered into in Eagle Farm, Hemmant • TheFlower Property Group’s purchase and Pinkenba in the six months to shows a capital value rate of $2,403/m2. It is September 2012. notable that this above average rate reflects • Rental rates have remained unchanged since the property’s key attributes including its the second half of 2011 with Prime grade net Pinkenba location, modern office warehouse rents ranging between $110/m2 - $120/m2 construction with extensive hardstand and and secondary grade net rents between $80/ the presence of a long lease. Overall, Prime m2 - $110/m2 Average Capital values were unchanged over the period, ranging between $1,200 and $1,600 as Average Market Reversionary Yields remained between 8.00-8.75%. Australia TradeCoast remains a sought after area with some slight downward pressure on yields still possible over 2013. Colliers International | p. 4
    • research & forecast report | second HALF 2012 | industrial | brisbane Brisbane Northside and Outer North LEASING VOLUMES DOWN SLIGHTLY PURCHASERS RE-ENTER THE MARKET • Rents have held steady over the last six months • Following a relatively quiet period in the first while the fall in the amount of available space half of 2012, during the second half there were within the Northside Precinct (which includes there three transactions over the $5 million areas within the suburbs of Hendra, Northgate, threshold. And in similar fashion to the Banyo, Virginia, Geebung and Zillmere) has Australia TradeCoast the purchases have been continued to impact the market. Prime rents made by a diverse group of businesses. Lusch are expected to remain supported by the lack Properties bought a modern freestanding officeHearing device manufacturer Bernafon signed alease at Unit 4, 629 Nudgee Road, Nudgee of speculative construction. warehouse at Geebung which accommodates • Leasing activity has eased slightly in the second paper merchant PaperlinX Australia. An online half with three significant leasing transactions retailer took ownership of a freestanding office occurring throughout the area. Distinctive Tile warehouse featuring a generous office Imports (DTI) signed a lease for 3,708 m2 at component under vacant possession. Zillmere. DTI supplies vitrified tiles, glazed Meanwhile, a private investor purchased a porcelain tiles ceramic tiles, mosaics and 3,000 m2 building incorporating laboratory and cleaning product throughout Australasia. Their office space. The premises were pre- new premises provide additional space for committed to Weatherford Australia Pty Ltd warehousing at the rear. Bernafon, a which is part of the Weatherford International manufacturer of hearing devices which group of companies that provides products and employs about 100 people signed an 8 year services to the oil and natural gas sectors. lease with two five year options for an office • PrimeAverage Capital values continued to fall warehouse in Nudgee. The move from their between $1,200 and $1,600 during the period. previous site in Milton was mainly driven by a With limited new speculative stock expected to need to be close to the Brisbane Airport as enter the market and demand firm, Prime their entire product is airfreighted. The other grade yields should be supported at around significant lease during the half was signed by current levels into the 2013. scrap metal dealer Express Metal Recycling. For this business, the key site attributes are the LAND IN DEMAND WITH NO presence of both hardstand and warehouse SPECULATIVE PRODUCT with separate office area and exclusive rights to • As in other Brisbane metropolitan industrial two of the three entrance points to the facility. Precincts, companies are seeking freestanding • Inthe Northside, Prime grade net rents range quality buildings on the Northside and outer between $110 - $120/m2 pa and secondary North. There remains very little in terms of grade net rents fall between $60 - $90/m2 pa. speculative development therefore design and In the Outer North, (which includes Brendale, construct represents the only real option. Strathpine, Lawnton, North Lakes, Narangba, Deception Bay, Burpengary, Kippa Ring and Clontarf), prime grade net rents are slightly lower than the more central Northside Precinct while secondary grade net rents are between $75 - $95/m2 pa. Colliers International | p. 5
    • research & forecast report | second HALF 2012 | industrial | brisbane Southside and Outer South LEASING PICKS UP • Benlee Property Trust No 5’s purchase of a • Leasing modern office warehouse in Heathwood volumes rose in the Southside and follows on from its purchase in March of a Outer South Industrial Precincts with 9 purpose built modern facility at Pinkenba. leases for properties with floorspace greater Their Heathwood property which is also than 2,000m2 signed off. This follows on located in a transport rich industrial hub is from a quieter period in the first half when fully leased to two tenants including Carey’s only five leases were sealed. freight Lines and Symbio Australia. • Although demand and enquiry levels wereManufacturing firm Star Solutions signed a lease at • Average Prime Capital Values remained healthy, average net face rents have remained39 Iris Place, Acacia Ridge between $1,300/m2-$1,500/m2 in the steady. This is largely due to the breadth of Southside and Outer South precincts. demand for industrial floorspace which was Similarly, Average Market Reversionary Yields driven by the accommodation needs of firms have remained steady over the six months to in the machinery/automotive services, September 2012 ranging between 7.75-8.5%. manufacturing, logistics and wholesaling/ retailoring sectors. • The southern corridor represents a strategic • In location particularly for logistics firms and another period where little additional new businesses servicing the mining and supply has come online, this broad based resources sectors. This is reflected by some demand is expected to keep pressure on recent land transactions. All Purpose rents for quality properties in the 5,000m2 – Transport purchased a 4ha englobo parcel in 25,000m2 category. The supply shortage is Berrinba in August at the rate of $105/m2. In expected to be met primarily by design and a purchase of serviced land, Mc Phee construct development over the year ahead Distribution Services paid $220/m2 for a site with 96,000m2 of product in various stages in Larapinta. Like many logistics firms, of construction in the Southside and Outer McPhee is consolidating its operations. It has South precincts. plans to construct a $15 million facility to be • Rents were steady over the period with operational by March 2013. Southside Prime grade net rents ranging between $95 - $115/m2 pa and secondary grade net rents between $65 - $95/ m2 pa. Outer South Prime grade net rents range between $100 - $120/ m2 pa and secondary grade net rents easing to fall between $60 - $100/m2 pa. INFRASTRUCTURE DRIVING GROWTH • Sales transaction volumes also picked up from the H1 2012 with four significant sales. Significant transactions included purchases by listed property group Charter Hall, the Benlee Property Trust No 5, a private investor and removalist company Kent Transport Industries. • harter C Hall purchased a Kingston property which was formerly owned by Watpac. Upon completion of a second construction stage which is scheduled in March 2013, the property will feature buildings and awnings as well as 16,643m2 of hardstand, gravel hardstand of 33,865m2 and some asphalt hardstand. The property is leased to Coates hire. Colliers International | p. 6
    • research & forecast report | second HALF 2012 | industrial | brisbane Outer South West Precinct STABLE LEASING MARKET DEVELOPMENT ACTIVITY • While a broad range of industrial firms • Thereis approximately 50,000m2 of new operate in this Precinct, its western location stock in the South West development pipe that makes the area attractive to firms servicing is ether under construction, let for the needs of the resources and mining construction or has site preparation works industry. underway. Property groups Australand and • Yet, over the last six months, mining related Dexus are continuing to show confidence in leasing transactions were less prominent as the precinct with their investment and major leasing deals were entered into by development in the area.Brisbane Tray Bodies committed to a lease at 39McRoyle Street, Wacol automotive firms, manufacturers as well as • Australand is currently providing the only companies servicing the mining and resources major speculative stock addition to the Outer sector. South West with construction of a • Brisbane Tray Bodies, an automotive development of a 15,000m2 facility in machinery firm specialises in high quality Boundary Road in Richlands underway. steel vehicle products including products • Latelast year, Dexus purchased two adjoining which are compliant for the mining sector, lots (Lot 1 and 2) at 3676 Ipswich Road, signed a lease for a 4,275 m2 premises at Wacol. Construction of one building is nearly Wacol. Also at Wacol, OneSteel Recycling complete with Nissan set to occupy signed off on a lease for a 7,661 m2 facility. approximately 7,000m2 while construction is OneSteel Recycling is an international also underway on the second building. company which provides processed quality ferrous and nonferrous recycled metal to Australian steel mills, the foundry industry, domestic copper, brass, lead and aluminium industries. • Although demand remained strong and some speculative product is being delivered to the local market, Prime grade net rents remained steady and ranged between $100 - $120/m2 pa and secondary grade net rents between $60 - $100/m2pa. SALES MODERATE • Following a recovery in sales in the first half when five transactions over $5 million occurred, in the second half transactions eased to more sustainable volumes. Notably, these sales achieved the three highest prices in the Brisbane region during the period. • Two of these were purchases by 360 Capital from Walker Corporation properties located at Ebbw Vale. The third sale was Heathley Ltd’s purchase of a property owned by the Trinity Group located in Richlands. • Although there was an increase in transaction activity, no compelling evidence of change to Prime Average Capital values could be discerned so the range of values continued to fall between $1,300 and $1,500/m2 while Average Market Reversionary Yields fell between 8.00-8.75%. Colliers International | p. 7
    • research & forecast report | second HALF 2012 | industrial | brisbane Yatala Enterprise Area SALES LEASING • The Yatala Enterprise Area (YEA) includes • Although firms servicing the needs of the industrial areas within Ormeau, Stapylton mining and resources sectors dominated the and Yatala. It has been long regarded as the taking up of space, overall leasing activity key area to accommodate industrial decreased significantly over the period, with floorspace demand from industrial firms less than 19,000m2 of industrial space leased32 Business Street, Yatala became the premises of geared towards servicing both the Brisbane compared with nearly 60,000m2 in the firstmanufacturer Pearls MiiHome, a firm specialising in and Gold Coast markets. half.demountable housing. • There was only one transaction recorded • Numbers of leases were also down with two over the $5 million threshold. AEL Holdings significant leases signed this half compared purchased a 5,081m2 facility at 55 Blanck to nine in the first half. Street, Ormeau for $6.75 million in July. In • PearlsMiiHome, an Indian based company another transaction, not quite over $5 million, specialising in demountable and relocatable an undisclosed buyer purchased a modern housing, has leased 3,215m2 in Yatala. While 1,692m2 facility at 149 Old Pacific Highway, Saipem Australia, a large energy services Oxenford for $4.7 million in June. provider, has taken 3,075m2 at Stapylton. • Colliers International area specialists have • Prime grade net rents remained steady over noted an increase in inquiry by owner- the period, ranging between $100 - @120/m2 occupiers for 2-4 hectare parcels which pa, while secondary grade net rents ranged remain in limited supply. from $75 - $100/m2 pa. • It is also notable that tenant enquiry has also been at healthy levels. This is consistent with the area’s reputation as an overflow region for industrial users who are finding it increasingly difficult to secure suitable space in the Australia TradeCoast and South and Outer South West markets. Yatala industrial property yields Yatala Industrial Yields 10.50% 10.00% 9.50% % Average Reversionary Yields 9.00% 8.50% 8.00% 7.50% 7.00% 6.50% 6.00% H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 H2 2012 Prime Grade - Yields Secondary Grade - Yields Source: Colliers International Research Source: Colliers International Research Colliers International | p. 8
    • research & forecast report | second HALF 2012 | industrial | brisbaneNew Supply Pipeline development update Estimated Comments Address Suburb Total Area (m²) Status Completion Owner/Comment Date Australia TradeCoast 59 Sugar Mill Rd (Lot 2 RP Construction of 4 new interconnected warehouses and ancillary Pinkenba 8,127 Under construction 2012 119762) office. Construction of depot for Australian Container Freight Services Bishop Drive Port of Brisbane 26,500 Contract let 2013 to include warehouse with free standing office and container hardstand. North Side and Outer North 524 Bilsen Rd (110 Zillmere Energex depot redevelopment including warehouse, workshop Rd Lot 2 SP 198921 & Lot 1 Geebung 9,875 Under construction 2012 and office. RP801643)) South Side and Outer South Proposed demolition of one building, refurbishment of some 98 Kerry Rd (Lot 24 RP Archerfield 5,500 Under construction 2013 existing buildings and construction of new warehouse with 100451) external storage area. Site preparation in Construction of industrial building with 14817sq m warehouse & 77 Logistics Pl (Lot 3) Larapinta 15,330 2013 Progress office 1123 Beaudesert Rd (Lot 1 Conversion of existing warehouse to provide warehouse, Acacia Ridge 21,660 Under construction 2012 RP 188127) workshop, administration and display area 495 Wembley Rd (Part Lot 1 Construction of 2 storey industrial building with warehouse, office Berrinba 25,000 Under construction 2013 RP 886148) and amenities. 3511 - 3513 (Lot 1) Pacific Slacks Creek 5,513 Contract let 2013 Proposed new Ikea warehouse next to existing Ikea store. Hwy RP213986 & RP220177 Construction of warehouse with ground floor office and 198 Paradise Rd Willawong 5,900 Contract let 2012 mezzanine office 84-88 (Lot 1) Magnesium Dr Construction of a warehouse for the minor processing and Crestmead 7,115 Under construction 2013 SP106313 storage of timber. Outer South West 105 & 121 Coulson & 100 Staged construction of 3 separate buildings incluiding an Tile Sts (Lots 47 & 48 Wacol 14,737 Under construction 2012 industrial facilty for assembly of mining trucks. RP79956 Lot 34 RP80077) Construction of 2 industrial buildings. Building 1 will be a Nissan 163 Viking Dr, 3676 Ipswich Wacol 13,629 Under construction 2012 Warehouse with ancillary office. Building 2 to be a warehouse Rd (Lot 1 SP 208830) with ancillary office. 14-28 Flint St, 374 Boundary Reconfiguration of 4 lots into 2 lots & construction of 3 Richlands 15,016 Under construction 2012 Rd (Lot 1 RP 223135) warehouses with ancillary office in 2 stages.Source: Cordells / Colliers International Research Colliers International | p. 9
    • research & forecast report | second HALF 2012 | industrial | brisbaneRecent Market Activity Leasing Activity Address Suburb Start Date Area (m2) Net Face Rent ($/m2 pa) Tenant Australia TradeCoast 55 Brownlee Street Pinkenba Jun-12 5,597 $107 Harris Communications 111 Brownlee Street Pinkenba Jun-12 2,041 $200 Mastermyne 860 Kingsford Smith Drive Eagle Farm May-12 2,957 Gerrard Lighting 17 Sugarmill Road Eagle Farm Jul-12 5,087 $157 Thales Australia 46-58 Gosport Street Hemmant Jun-12 12,860 OneSteel 1 Wyuna Street Hemmant Aug-12 3,400 $127 (gross) Toll Energy North Side 485 Zillmere Road Zillmere Jul-12 3,708 $45 Distinctive Tile Imports 89-115 Frederick Street Northgate May-12 2,187 $61 (gross) Express Metal Recycling 4/629 Nudgee Road Nudgee Aug-12 2,900 $182 Bernafon Australia South Side 22 Ashover Road Acacia Ridge Jun-12 3,052 $98 Atom Supply 39 Iris Place Acacia Ridge Jul-12 3,526 $112 Star Scaffolds Ipswich Road Rocklea Jul-12 3,500 $75 Autoparts 44 Shettleston Street Rocklea Jul-12 2,000 $75 Emerald Refridgerated Logistics 79 Bradman Street Acacia Ridge Aug-12 2,500 $75 Access Service 116 Grindle Street Rocklea Sep-12 3,224 Waynes World Outer South 39 Distribution Street Larapinta Aug-12 3,453 $116 Personalised Freight Management 13-23 Budu Court Meadowbrook Sep-12 4,562 $139 Australian Portable Buildings 100 Southlink Street Parkinson Sep-12 2,270 $120 Actrol Outer South West 39 McRoyle Street Wacol Jul-12 4,275 $126 Brisbane Tray Bodies 124 Viking Road Wacol Aug-12 7,661 $73 OneSteel Recycling Yatala 63 Burnside Road Stapylton May-12 3,075 $93 Saipem Australia 32 Business Street Yatala May-12 3,215 $118 Pearls MiiHomeSource: Colliers International Research Colliers International | p. 10
    • research & forecast report | second HALF 2012 | industrial | brisbaneRecent Market Activity SALES Activity Capital Sale Price Date of Reversionary Address Suburb GLA m2 Value Vendor Purchaser $M Sale** Yield* $/m2 Australia TradeCoast 175 Eagle Farm Road Pinkenba $12,550,000 May-12 5,222 $2,403 8.73% Property Solutions Flower Property Group 46-58 Gosport Street Hemmant $16,000,000 Jun-12 12,860 $1,244 9.73% OneSteel Trading Pty Ltd Sentinel No 5 Pty Ltd 37 Eagleview Place Eagle Farm $7,200,000 Sep-12 3,917 $1,838 Private Fidelis Investments Ltd Accumulus Investment 80 Canberra Street Hemmant $13,250,000 Jul-12 45,000 $294 8.72% Charter Hall Group North Side and Outer North 58 Brickyard Road Geebung $9,400,000 May-12 9,452 $994 9.84% RACQ Operations Pty Ltd Lusch Properties Pty Ltd Australand Stationary 931 Nudgee Road Banyo $5,750,000 Aug-12 6,229 $923 Undisclosed Distributors Lots 2 and 3 Lietchs Road Brendale $7,249,700 May-12 3,000 $2,417 8.00% Private South Side and Outer South 29-47 Mudgee Street Kingston $20,850,000 Sep-12 3,527 $350 7.90% Watpac Charter Hall Benlee Property Trust 71 Stradbroke Street Heathwood $6,750,000 Jun-12 5,540 $1,218 9.85% 360 Capital No.5 38 Westgate Street Wacol $8,750,000 Sep-12 13,790 $635 Private Kent Transport Industries Seventeen Private 104 Bluestone Circuit $5,000,000 Apr-12 2,645 $1,890 8.00% Mile Rocks Outer South West 453-479 Freeman Road Richlands $24,500,000 May-12 13,142 $1,864 9.06% Trinity Group Heathley Ltd 22 Hawkins Crescent Ebbw Vale $32,000,000 Jun-12 18,956 $1,688 8.48% Walker Corporation 360 Capital 1 Ashburn Road Ebbw Vale $30,300,000 Jun-12 26,628 $1,138 8.74% Walker Corporation 360 Capital A.E.L. Holdings Australia 55 Blanck Street Ormeau $6,750,000 Jul-12 5,081 $1,328.48 Steel Foundations Ltd Pty Ltd* Yields quoted are reversionary yields** Sale date refers to date of exchangeSource: Colliers International Research Colliers International | p. 11
    • research & forecast report | second HALF 2012 | industrial | brisbaneBrisbane Infrastructure Update Infrastructure Update Estimated Comments Infrastructure Project Location Status Completion Owner/Comment Date Rail The project includes two train stations – one near Woodcrest College and one near Richlands to the Orion Shopping Centre, a 9.5km dual track rail line from Richlands to Springfield, Rail Extension U/C 2013 Springfield an auxiliary city-bound lane on the Centenary Highway and two crossings under the Centenary Highway from Springfield station to the Orion Shopping Centre. Road Toowong to Construction of twin, two-lane tunnels, approximately 4.6km in length which will run Legacy way U/C 2014 Kelvin Grove between Toowong and Kelvin Grove. A $385 million upgrade of the Port of Brisbane Motorway now known as Port Connect Port of Brisbane Motorway Lytton U/C 2013 which will include a new interchange. Will eliminate the need for heavy vehicles to use Lytton Road. Port Future Port Expansion to provide an additional 230 hectares of port land and increased Future Port Expansion Fisherman Islands U/C Ongoing quay line.Source: Colliers International Research Colliers International | p. 12
    • research & forecast report | second HALF 2012 | industrial | brisbaneOutlook 522 offices inThe key metrics remained steady over the second half and for 2012 as a whole. Looking forward, asustained improvement in the Brisbane industrial market remains as the most likely scenario for the 62 countries onBrisbane industrial market in 2013. 6 continentsDemand for prime investment grade industrial assets should continue to be supported by the United States: 147 officesexpenditure in the mining and resource sectors. Although sentiment in the mining and resources Canada: 37 officessector has been impacted by falling commodity prices, investment activity remains at high levels. Latin America: 19 officesThe lower interest rate regime should also assist in stimulating demand for a range of consumer Asia Pacific: 201 officesitems which move through Queensland’s supply chains. In addition, growth in containerised trade EMEA: 118 officesthrough the Port of Brisbane will assist in underwriting demand for distribution and warehouse • $1.8 billion in annual revenuefloorspace into 2013. These three factors should work together to provide some confidence for theBrisbane industrial market into 2013. The key risk to this outlook is the potential for a weak billion square feet under • 1.2Queensland labour market to impact on the parts of the industrial market that are sensitive to managementresidential services and consumption. • Over 12,300 professionalsLooking into 2013, there may be some potential for demand for industrial product to push yields onsome high quality property slightly lower but yields are expected to remain at current levels in theband from 7.75-9.0%. COLLIERS INTERNATIONALThere is approximately 164,000m2 of new industrial construction in the development pipeline which Level 20, Central Plaza One, 345 Queen Streetis either let for construction, under construction, in site preparation stage or more than half way Brisbane, QLD 4000finished construction. However construction of new speculative product (above 5,000m2) has been tel 07 3229 1233almost non-existent with Dexus and Australand being the major property groups showing confidence FAX 07 3120 4583in the Brisbane market over the past year or so. With overall demand conditions healthy and supplyconditions tight, it is considered that rental pressures will gather for prime investment grade assets.In light of this, rental growth for prime investment grade assets is likely to rise over the course of2013 with this growth likely to be in the order of 2.5-4.5%. Meanwhile, rental growth for secondary researchergrade product is likely to be relatively flat and consistent with the markets recent performance. Mark Courtney DirectorWhile the mining and resources sector will continue to play an important role in taking up space in tel 07 3026 3302Brisbane’s industrial market in the coming few years, one notable feature of the second half was the FAX 07 3166 0402diversified nature of tenants and purchasers. This is another positive sign for the Brisbane industrialmarket as such diversity should continue to create opportunity into 2013. Colliers International does not give any warranty in relation to the accuracy of the information contained in this report. If you intend to rely upon the information contained herein, you must take note that the information, figures and projections have been provided by various sources and have not been verified by us. We have no belief one way or the other in relation to the accuracy of such information, figures and projections. Colliers International will not be liable for any loss or damage resulting from any statement, figure, calculation or any other information that you rely upon that is contained in the material. COPYRIGHT - Colliers International 2012. Accelerating success. Colliers International | p. 13www.colliers.com.au/research