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  • 1. SECOND HALF 2012 | INDUSTRIALResearch & Forecast ReportPERTH INDUSTRIAL Medium Term Uncertainty Impacting Market Perth’s industrial sector rental market was stable over the first half of 2012 amid ongoing economic uncertainty. Most reported leasing enquiries have been for short to medium-term project space associated with the resources sector and its related service industries. Transactions for the first half of 2012 have been positive, showing signs of improvement after a lacklustre 2011. There has been a notable increase in receiver/manager liquidation listings in 2012, particularly in businesses not directly connected with the resources sector.6 Dampier Road, Welshpool Credit market conditions remain tight in 2012 as banks continue to limit or avoid further exposure toThis property on 5,108m2 of land was sold in May potentially non-performing loans.2012 for $3.54m exclusive of GST. The sale was avacant possession sale to the existing tenant. Notwithstanding these uncertainties, demand for quality large space continues, albeit easing somewhat. This is particularly true for short to medium-term tenancies. Presently, there are no real signs of an increase in vacancies in these property types - and this is unlikely to be due to a lack of new prime supply.Market Indicators Forecast - 6 months The availability of large prime industrial space remains tight, and this is also the case with prime industrial land. According to Real Commercial listings in October, there are only three properties with Overall Performance building areas greater than 10,000m2 for lease in metropolitan Perth. While the market for such properties remains tight, an examination of sales data indicates a persistent New Supply two-tiered market. Tenant Demand Research by Colliers International has revealed that of the 688 industrial properties listed for lease in the Perth metropolitan area at the beginning of October 2012; approximately 83% offered building Incentives areas of less than 1,500m2 . Face Rents This is most notable in the northern suburbs, where less-established precincts have a significantly higher volume of smaller properties. Of the 573 listings for properties below 1,500m2, 36% are in the Capital Values northern metropolitan corridor. The pre-lease market has been subdued in 2012 to date. In the current market, we are seeing a Yields preference for short-term (two to three year) leases. LAND VALUES Prime warehouse rents range from approximately $90/m2 to $125/m2, while secondary warehouse rents average between $80/m2 and $90/m2. The first half of 2012 saw an improvement in the volume of vacant land transaction activity.KEY HIGHLIGHTS Large prime warehouse space rents were PERTH INDUSTRIAL MARKET INDICATORS stable in the first half 2012 as availability Average Net Average Land Average Capital remained limited Region Grade Face Rents Average Average Market Values Incentives Value ($/m2) Yield* Pre-leasing and design & construct remain ($/m2 pa) ($/m2) limited and harder to complete as few LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH tenants are willing to commit to long leases Prime $90 $125 0% 5% $1,000 $1,500 8.00% 9.00% CORE $350 $600 Banks maintaining strict credit conditions Secondary $80 $90 5% 10% $750 $1,000 9.00% 10.00% with available funds reduced due to new Prime $90 $125 0% 5% $1,200 $1,500 8.00% 9.00% NORTH $225 $550 banking regulations Secondary $80 $90 5% 10% $750 $1,000 9.00% 10.00% Vacant land transactions improved over the Prime $90 $125 0% 5% $1,000 $1,500 8.00% 9.00% SOUTH $165 $500 H1 2012. Secondary $80 $90 5% 10% $750 $1,000 9.00% 10.00% Prime $90 $125 0% 5% $1,000 $1,500 8.00% 9.00% EAST $250 $600 Secondary $80 $90 5% 10% $750 $1,000 9.00% 10.00% * Equivalent Reversionary Yield Data correct as of Q3 2012 Source: Colliers International Research (Exclusive of strata properties)www.colliers.com.au/research
  • 2. research & forecast report | SECOND HALF 2012 | INDUSTRIAL | PERTH Economic Update SOLID NATIONAL GROWTH According to the June Quarter Australian Bureau of Statistics (ABS) data, Gross Domestic Product (GDP) grew 0.6% in seasonally-adjusted terms during Q2. Although slower than the strong Q1 result of 1.4%, through-the-year GDP growth was a solid 3.7%. Deloitte Access Economics expects annual GDP growth to be 3.0% in 2012-13, rising to 3.4% in 2013-14 before easing to 3.3% in 2014-15. UNEMPLOYMENT RATE STEADIES AS JOBS GROWTH DISAPPEARS The national unemployment rate remains at the healthy level of 5.2% (trend) where it has settled over the past four months. However, monthly full-time jobs growth has disappeared. August full-time jobs data shows there was a contraction (600) in the number of jobs. Over the 12 months to August 2012, full-time employment actually increased by 27,900 jobs – and while this is the largest increase seen over a 12-month period since October 2011, it is well below trend. The ANZ Job Advertisement Series showed that number of job advertisements fell 2.3% in August after falling 0.8% in July, marking the fifth consecutive monthly fall. CONSUMER PRICES SETTLE The latest inflation data from the ABS shows that annual headline inflation rose just 1.2% during the 12 months to June 2012, down compared with a rise of 1.6% through the year to March 2012. This saw the Consumer Price Index (CPI) grow by 0.5% during the quarter, and ensures that the inflation rate remains well below the Reserve Bank of Australia’s target range of 2% to 3%. INTEREST RATES STEADY 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 2012. The Bank pointed out that further effects of actions already taken to ease monetary policy can be expected over time. THE AUSTRALIAN DOLLAR The $A peaked at $US1.10 in July 2011. However, during late December 2011 it fell below parity. It regained value in recent months and following the April 2012 interest rate announcement, the Australian dollar was trading circa $US1.04. PERTH INDUSTRIAL MARKETS Neerabup North Wangara Malaga Balcatta Midland Bayswater Osborne Park Hazelmere Perth Belmont CBD East Welshpool/Kewdale Fremantle Cannington O’Connor Maddington Canning Vale Forrestdale Bibra Lake Armadale Henderson Kwinana South Rockingham Colliers International | p. 2
  • 3. research & forecast report | SECOND HALF 2012 | INDUSTRIAL | PERTH Key Market Indicators Gross State Product Gross Domestic Product (GDP) vs. W.A. GROSS DOMESTIC PRODUCT (GDP) vs WA GROSS STATE PRODUCT • The Deloitte Access Economics - Business Outlook September 2012 indicates Western Gross State Product (GSP) 7% Australian Gross State Product (GSP) grew Deloitte Access Economics Forecast % Change on previous year 6% 4.7% in the 2011/2012 financial year, compared to a national growth of 3.4%. This strong level 5% of performance relative to the national growth 4% is expected to continue out to 2016/2017, with 3% WA GSP tipped to outperform GDP growth in every year – albeit with some contraction in the 2% disparity. 1% 0% 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 INDUSTRIAL SPACE SUPPLY • According to Cordell and Colliers International Research, industrial supply for space over Australia GDP WA GSP 3,000m2 in the Perth metropolitan area is Source: Deloitte Access Economics Business Outlook - September quarter 2012, Colliers International Research Source: Deloitte Access Economics - Business Outlook September Quarter 2012/ Colliers International Research expected to peak in 2012 before experiencing a significant retraction over the next three years. Supply for 2012 is expected to be approximately perth industrial DEVELOPMENT PIPELINE 190,000m2 of space, with that figure expected to fall to around 55,000m2 in 2013. 250,000 • This is likely to see rents for large space remain buoyant in the short to medium term, barring 200,000 contractions in demand as a result of any Industrial Space Supply (m2) significant downturn in economic conditions or 150,000 investment levels in the resources sector. • Financing conditions have been an inhibitor to 100,000 large space supply, and it has been mainly syndicates and major private developers and investors that have driven supply in recent years. 50,000 0 2011 2012 2013 2014 2015 CONTAINER TRADE • Full container movements through Fremantle Source: Cordells / Colliers International Research Port are historically strong and continue to trend upwards. Total volume continues to be well FREMANTLE PORT FULL CONTAINER MOVEMENT above the 10-year average of 32,239 twenty-foot equivalent units (TEUs). 50,000 • In August 2012, the Fremantle Port Authority 45,000 reported 44,426 full TEUs passed through Fremantle Port, excluding trans-shipments. Of 40,000 these, 73.3% were imports and 26.6% were 35,000 Number of Full TEUs exports. 30,000 • Direct full-container imports increased 19.4% to 25,000 32,559 TEUs over the month to August 31 2012. 20,000 Direct full-container exports experienced a large 15,000 decline in volume, down 29.2% to 11,813 TEUs. 10,000 • ABS International Trade statistics for the 2012 5,000 financial year indicated a 7.51% increase in export value to $120.6 billion. For Western 0 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Australia, imports increased 35.17% in value to $35.1 billion. Full Container Movements 10 Year Average 12 Month Moving Average Source: Fremantle Port Authority / Colliers International Research Colliers International | p. 3
  • 4. research & forecast report | SECOND HALF 2012 | INDUSTRIAL | PERTH Perth North • The June 2012 quarter yielded 75 property transactions with a total value of $74.5 million. • 2011/2012 saw a 4.9% improvement in transactional volume on the previous financial year, with 298 sales registered. Perth North was the most active of the regions for annual transactional activity. • Total value of transactions amounted to approximately $341.46 million for 2011/2012 which is an increase of 16.2% on the previous year. • Strata titles accounted for 69.8% of transactions, marginally down on the 2010-11 proportion of 70.1%. • Vacant land transactions made up 15.8% (47) of total transactions for 2011/2012. Of these, 28 occurred in the first half of 2012, with the June 2012 quarter featuring 18 transactions. • Vacant land values were generally stable, ranging between $250/m2 and $550/m2 . Non-Strata/Large Properties • Prime warehouse rents remain stable, ranging between $90/m2 and $120/m2.135 Kewdale Road, Kewdale • Capital values for near-new properties are improving and currently range between $1,000/m2 andA little over half of this secondary grade warehouse $1,500/m2.was leased to Chevron in June 2012 for 4 years at arate of $90 per square metre. • Yields are between 8.0% and 9.0%. Strata/Small Properties • Prime warehouse rentals remain between $95/m2 and $130/m2. This is the segment of the industrial market where incentives are becoming common. • Capital values for near-new properties are generally ranging between $1,300/m2 and $2,500/m2. • Yields remain steady at between 6.5% and 8.0%. Perth East • Large warehouse space continues to be buoyant, with good enquiry levels. However, demand for long- term leases is limited in the current uncertain economic climate. • Transaction volumes increased 8.9% to 207 transactions in the financial year 2011/2012, The June quarter saw approximately 46 transactions; down marginally from the March quarter. • 48.3% of the transactional volume in 2011-12 consisted of strata-titled properties. • The value of transactions in 2011/2012 totalled approximately $305.49 million. This resulted in the East region returning the lowest volume and total value transacted of the three metropolitan regions. Total value transacted was down approximately 10% from the previous financial year. • Vacant land transactions fell to 16 lots sold in 2011/2012, down from 19 in the previous year. Similarly to the North region, the first half of 2012 accounted for a large proportion of the financial year’s activity. • Vacant land values remained stable, as availability of land is minimal. Recent sales suggest land rates are generally ranging between $400/m2 and $600/m2. Colliers International | p. 4
  • 5. research & forecast report | SECOND HALF 2012 | INDUSTRIAL | PERTH Perth East Continued Non-Strata/Large Properties • Prime warehouse rents were stable in the first half of 2012, generally ranging between $90/m2 and $120/m2. • Capital values for near-new properties generally range between $1,000/m2 and $1,500/m2. • Yields remain between 8.0% and 9.0%. Strata/Small Properties • Strata warehouse rental values were also stable, at between $100/m2 and $150/m2 in the first half of 2012. • Capital values for near-new strata properties in first six months of 2012 generally ranged between $1,500/m2 and $3,000/m2. • Yields remain between 6.5% and 7.5%.1-7 Kaglan Road, WelshpoolThis property was sold in March 2012 for $4.31m fora market yield of 7.56%. Perth South • Following a significant retraction in transaction volumes in 2010-11, volumes increased marginally in 2011/2012 (up 1.7%) to 293. The region was a close second in terms of transactional activity for the financial year. • The proportion of strata transactions fell from 66% in 2010-11 to 49.5% in 2011/2012. • Total value of transactions amounted to approximately $318.94 million in 2011/2012, which was a $260.2 million (22.5%) increase in value on 2010/2011. • The volume of vacant land transactions was the highest of all the regions in financial year 2011/2012, increasing from 47 in 2010/2011 to 78 in 2011/2012. A high proportion of these (67%) occurred in the first half of 2012. • Vacant land values generally range between $200/m2 and $500/m2, with an average over the 2011/2012 financial year of $361/m2. Non-Strata/Large Properties • Prime warehouse rentals range between $80/m2 and $120/m2. • Capital values for near-new properties generally range between $1,000/m2 and $1,500/m2. • Yields remain between 8.0% and 9.0%. Strata/Small Properties • Warehouse rentals range between $95/m2 and $130/m2. • Capital values have been generally stable since the second half of 2011 at between $1,500/m2 and $3,000/m2. • Yields remain between 6.5% and 7.5%. Colliers International | p. 5
  • 6. research & forecast report | SECOND HALF 2012 | INDUSTRIAL | PERTHNew Supply Pipeline New Industrial Land Supply Project Name Suburb Area (ha) Lots Status Developer North First stage release in February 2008 of approximately 17 hectares. Currently (Feb Neerabup Industrial Estates Neerabup 400 ha n/a 2012) 10 lot of 22 are available ranging from 2,469m2to 9,818m2. Pricing is $198- Landcorp (Meridian Park) 263/m2 Part of larger business park that began in 1989. All Stages up to stage 12 have sold, Enterprise Park Stage 12 stage 12 has 29 lots available ranging from 2,019m2 to 8,290m2. As at Septmeber Wangara 9.5ha 29 Landcorp A,B & C 2012 - 15 lots are unsold; lots of around 2,000m2 to 3,000m2 are asking around $370/ m2 and larger lots around $295/m2. East High quality large tenants are being sought for Design and Construct. 140ha to be released 2008, Tenants now include Cummins Diesel, Western Power, Australia Post, Westralia Airports Perth Airport Precinct Kewdale 450 ha n/a Atlas Copco, Woolworths, Coles. Estimated balance remaining undeveloped 350ha. Corporation Project now seems to be idle for built form but are currently looking for new hard- stand tenants. Staged land subdivision with first stage released in early 2009. Delays have been Hope Valley Wattleup experienced. Stage 1A & 1B of Flinders Precinct now on market. Larger lots Redevelopment Project Kwinana 1,400 ha n/a available between $165/m2 and $210/m2. 6 of 9 Lots remain available with rates Landcorp (HVWRP) - Latitude 32 between $171 and $219/m2. Landcorp and agents are now offering to tailor land parcel requirement to prospective buyers for future releases. South All land currently on market, titles have been issued to all lots in stages 1, 2 & 3. 16 of 37 lots available in stage 1 ($375/m2 to $480/m2), 2 of 17 lots available in stage 2 Phoenix Business Park Bibra Lake 34 ha 63 Primewest ($360/m2 to $420/m2) and 11of 23 lots currently available for sale ($370/m2 to $400/ m2). Stage 1 through to 6 sold out. Stage 7N & 7S last two stages expected to begin Cockburn Commercial Park Bibra Lake 5.15ha 8 Landcorp release in late 2012 early 2013. Precinct likely to comprise 500,000m2 of leasable office, bulky goods retail and showroom, and light industrial and distribution warehouse space, all to be developed by Ascot Capital. Havey Norman is one of the major tenants in the precinct. Approx. Jandakot Airport Jandakot 160 ha n/a Ascot Capital 40% of stage 1 is developed. Approximately 31 lots in stage 1. Precinct 4 (mix business adjacent to the rail line) is undergoing forward works andexpected to be available in December 2012. 26 lots in total for the Support Industry Precinct and Subsea Cluster Fabrication Pre- Australian Marine Complex Henderson 193 ha n/a cinct with 6 lots remaining available (3 in Support and 3 in Subsea as at September Landcorp 2012) ranging between 2,489m2 and 12,900m2 ($250-$280/m2) Land delivered to market in 2008, All land have been released to the market as of Forrestdale Business Park Forrestdale 190 ha 20 2009 with 28 lots remain available for sale as of October 2012 ranging from 1,841m2 SAS Global to 9,408m2 and rates of $174/m2 to $302/m2. Seven precincts covering 1,150ha are suitable for warehousing, transport and logistics, medium to large fabricators and marine-related industries. Element Rockingham Industry Zone Rockingham 1,150ha n/a Landcorp Precinct first release in early-mid 2008 1,982m2 to 6,010m2. 3 lots are currently available between $260/m2 and $285/m2.Source: Colliers International Research Colliers International | p. 6
  • 7. research & forecast report | SECOND HALF 2012 | INDUSTRIAL | PERTHNew Supply Pipeline Recently Completed and Projects Under Construction Total Area Estimated Project/Location Suburb Status Comments (m²) Completion Date North Bulkygoods showroom and warehouse over 11 buildings, first three Malaga Home Centre Malaga 7,000 Completed Jun 12 buildings complete (G,H,I) 128-136 Great Eastern Hwy South Guildford 1,600 Completed Jun 12 Parts distribution centre and head office Westrac Distribution Centre East Wheeler St Belmont 10,000 Completed May 12 Data storage 3 (Lot 74) Sarich Wy Bentley 4,713 Under Construction Nov 13 Research & development facility Cocal-Cola (Stockyards - Coca-Cola Amatil facility 40,000m2 warehouse and 1,378m2 office. Hazelmere 41,378 Completed Jan 12 Bushmead Road) 20,053m2 of available for future warehouse Linfox Distribution Centre Hazelmere 27,000 Completed Jun 12 Linfox’s new Perth distribution centre over two buildings Iron Mountain - Division Welshpool 10,000 Completed Feb 12 Leased to Iron Mountain Street 274 (lot 91) Rutland Avenue Welshpool 4,547 Completed Jun 12 Warehouse development 111-133 (Lot 5) Division St Welshpool 12,600 Completed Jun 12 Office/warehouse 16 Riversdale Drive Welshpool 7,000 Completed Oct 12 Transport warehouse development 192 (Lot 100) Mills St Welshpool 11,130 Completed Oct 12 Warehouse development 58-60 Dowd Street Welshpool 8,000 Under Construction Dec 12 Office warehouse showroon 111-133 (Lot 5) Division St Welshpool 10,260 Under Construction Mar 13 Warehouse development 35 (Lot 903) Tomah Rd Welshpool 7,000 Under Construction May 13 Warehouse development South Cnr Armadale & 630 Lakes Armadale 14,900 Under Construction Nov 12 Bunnings warehouse Rd Cnr Phoenix & North Lake Bibra Lake 13,500 Completed Jun 12 Oxygen hardware Rds 12A (Lot 103) Baile Rd Canning Vale 6,294 Under Construction Mar 13 Warehouse development 280 (Lot 1002) Bannister Rd Canning Vale 4,000 Under Construction Jul 15 Canning Vale market addition Cnr Randord Rd & Remisko Forrestdale 14,000 Completed Mar 12 Masters warehouse Dr 27 (Lot 508) Alacrity Pl Henderson 8,429 Completed Sep 12 Factory extension 15 Burvill Crt, adjacent to the Kensington 6,000 Under Construction Nov 13 SKA data centre CSIRO facilitySource: Cordells/ Colliers International ResearchRecent Market Transaction ActivityIndustrial Leasing Activity Lease Start Net Face Rent Address Suburb Lease Area (m2) Tenant Date ($/m2)North675 Marshall Road Malaga Aug 12 2,089 100 Vetstar LogisticsEast135 Kewdale Road Kewdale Jun 12 14,342 90 Chevron157 Welshpool Road Welshpool Jun 12 1,800 90 KTI Transport159 McDowell Street Kewdale May 12 7,758 103 General Transport EquipmentSouth25 Quarimor Road Bibra Lake Jun 12 2,430 111 Cimeco5 Kalmia Road Bibra Lake May 12 1,090 123 Starr Structures5 Discovery Drive Bibra Lake Apr 12 1,638 104 Factory Direct Fencing35 Stockdale Road O’Connor Jun 12 3,500 80 iTi32 Gauge Circuit Canning Vale Apr 12 5,650 117 Mitre 10Jandakot Airport Jandakot Mar 12 7,200 100 M3 LogisticsSource: Colliers International Research Colliers International | p. 7
  • 8. research & forecast report | SECOND HALF 2012 | INDUSTRIAL | PERTH Perth Industrial Investment Sales Activity Sale* Sale Price Gross Lettable Capital Value ($/ Initial Yield Address Suburb Purchaser Vendor Date ($) Area (m2) m2) (%) North 11 Kirk Street Balcatta Feb 12 $ 3,500,000 1,998 $ 1,752 VP Ledgar Road Pty Ltd Fairbrother, Cameron Morr East 1-7 Kalgan Road Welshpool Mar 12 $ 4,310,000 2,708 $ 1,592 7.6 % Private Investor P & N Enterprises Pty Ltd 495-499 Abernethy Kewdale Mar 12 $ 11,100,000 6,177 $ 1,797 8.2 % Harlap Nominees Pty Ltd Zampatti Investments Road South Canning 7-27 Gauge Circuit Aug 12 $ 22,000,000 21,505 $ 1,023 7.7 % Undisclosed Dexus Funds Management Vale Canning 218 Bannister Road Mar 12 $ 61,500,000 55,808 $ 1,102 8.8 % Charter Hall Australian Unity ValeSource: Colliers International Research*Sale date is contract date Perth Vacant Industrial Land Sales Sale* Sale Price Address Suburb Land Area (m2) Land Value ($/m2) Purchaser Date ($) North L347 Distinction Rd Wangara May 12 $ 872,190 2,643 $ 330 Vhl Services Pty Ltd L341 Distinction Rd Wangara May 12 $ 895,620 2,714 $ 330 Sea Worthy Pty Ltd L348 Distinction Rd Wangara Apr 12 $ 1,020,250 2,650 $ 385 Wealthy Investments Pty Ltd 1 Uppill Pl Wangara Apr 12 $ 863,500 2,391 $ 361 Stanhope Holdings WA Pty Ltd 267 Camboon Rd Malaga Jul 12 $ 1,500,000 2,441 $ 615 Private 33 Finance Pl Malaga May 12 $ 1,342,000 6,530 $ 206 Premium Custody Services 338 Gnangara Rd Landsdale Apr 12 $ 5,500,000 20,310 $ 271 Pacific Energy Kps Pty Ltd Bassend- L 829 Purser Loop Apr 12 $ 1,867,310 3,173 $ 588 A & A Gorman Pty Ltd ean East 37 Tomah Rd Welshpool Apr 12 $ 10,850,913 22,126 $ 490 Komatsu Marketing Support 425South 6 Rawlinson St O’connor Apr 12 $ 1,650,000 3,885 $ 425 Ashburton Oilfield Service 85 Erceg Rd Yangebup May 12 $ 407,000 1,502 $ 271 Pokol Pty Ltd Kwinana 14 Butcher St Apr 12 $ 971,520 3,680 $ 264 Private Beach 923 Cockburn Rd Henderson May 12 $ 1,600,000 6,383 $ 251 Alcom Properties Pty Ltd 78 Sparks Rd Henderson May 12 $ 4,235,000 15,392 $ 275 Thyssenkrupp Materials Handling 31 Stuart Dr Henderson Apr 12 $ 1,540,000 5,102 $ 302 Ikad Enterprises Pty Ltd 1 Hensbrook Loop Forrestdale Jun 12 $ 533,500 2,158 $ 247 Ambro Investments Pty Ltd 28 Da Vinci Way Forrestdale May12 $ 715,000 3,156 $ 227 Bj Hilbert Pty Ltd 16 Da Vinci Way Forrestdale Apr 12 $ 871,200 3,698 $ 236 Private L 2010 Sphinx Way Bibra Lake Jul 12 $ 1,476,475 3,835 $ 385 Westim Pty Ltd L2009 Sphinx Way Bibra Lake May 12 $ 655,270 1,702 $ 385 Private L2020 Horus Bend Bibra Lake May 12 $ 500,500 1,300 $ 385 Skywalker Pty LtdSource: Colliers International Research/ Landgate*Sale date is contract date Colliers International | p. 8
  • 9. research & forecast report | SECOND HALF 2012 | INDUSTRIAL | PERTHInfrastructure Update METROPOLITAN INFRUSTRUCTURE UPDATE Est. Completion Projects Location Status Comments Date Roads A new grade-separated interchange at the intersection of Great Eastern Highway and Roe Highway, Midvale. This is an important road project that is vital to maintain the major Great Eastern/Roe Highway Midvale Completed Jun 12 traffic arteries leading in and out of Perth. It enables Roe Highway traffic to flow freely Interchange over Great Eastern Highway via a bridge and efficiently and safely integrate connecting traffic in all directions. Widen & upgrade around 4.5 km of Kwinana Freeway between Leach Hwy & Roe Hwy, Bull Creek, Under Kwinana Fwy Upgrade Dec 12 realign Kwinana Freeway northbound exit ramp at South St, new intersection at South St & Leeming Construction newly constructed Fiona Wood Rd. Widen Great Eastern Hwy from 4 lanes to 6 lanes between Kooyond Rd and Tonkin Hwy, Under Great Eastern Hwy Upgrade Belmont Jul 13 upgrade major intersections, construct underpass adjacent to Abernethy Rd, construct Construction dedicated cycling lane 1.5 m wide. Increase lane capacity - Graham Farmer Freeway (Northbridge) tunnel and add an extra lane to the Mitchell Freeway northbound to Hutton Street. This $57m project is part of a Graham Farmer Tunnel & Under Northbridge Dec 13 package of solutions to improve the operation of the CBD road network and address the Mitchell Freeway Widening Construction challenges associated with Perth’s increasing population and the impact of the Elizabeth Quay redevelopment. Hepburn The work will be undertaken on the median side of the freeway within the existing road Mitchell Freeway Widening Avenue to Proposed 2014 reserve, and involves adding a third lane along a 7.2 km stretch of the freeway. Hodges Drive Extension from Burns Beach Rd to Neerabup Rd and bridge over freeway at Moore Dr. In Consultation process - the scope of the consultation has been determined and agreed to by Kinross, Mitchell Fwy Extension Proposed n/a the Minister for Transport and the Chair, Albert Jacob MLA, Member for Ocean Reef. From Clarkson the study, a business case will be developed and a road transport solution will be recommended to the Minister. This will be completed by the end of 2012. Main Roads has been undertaking a planning study for the future Perth-Darwin National Highway (PDNH) between Reid Highway and Bindoon. The study addresses the long term Reid Highway Proposed/ needs for the highway with a 20 to 30 year planning horizon, and is divided into three Perth Darwin National Highway to Maralla Road Early n/a sections: Reid Highway to Maralla Road Bullsbrook (study planning underway), Maralla Bullsbrook Planning Road Bullsbrook to Branch Highway Muchea (study complete), Brand Highway Muchea to Bindoon (study complete). Planned and will occur but no definite timing on commencement. Mains road looking for interim solution to increasing traffic volume. Tonkin Highway Extension Community Work- From Thomas Proposed/ ing Group (CWG) formed - group will undertake an investigative study and undergo a con- Extension of Tonkin Highway Rd, Byford to Early n/a sultation process to determine possible solutions to the traffic issues associated with the Mundijong Planning South Eastern Corridor. The recommendations will will inform a business case which will recommend a road transport solution to the Minister to consider by the end of June 2013. Kwinana Free- Proposed/ Government is committed to project and currently in design and consultation stage. This Roe Hwy Extension to way to Stock Early n/a project development work is expected to be completed in 2013 timing of commencement is Stock Road Road Planning subject to funding and environment and other regulator approvals. Upgrade of arterial road network around Perth Airport. Project includes a major freeway-to-freeway interchange at Tonkin Highway-Leach Highway, including a new primary access road to the consolidated airport terminal; new interchange at Tonkin Highway-Horrie Miller Drive-Kewdale Road; new interchange at Leach Highway-Abernethy Road; Upgrading Leach Highway between Orrong Road and Tonkin Highway to an Gateway WA - Perth Airport & Surrounds of Proposed 2017 expressway standard and associated upgrades to local roads and intersections in the Freight Access Project Perth Airport Kewdale area; A principal shared path along Tonkin Highway and Leach Highway; Upgrading of the existing Tonkin Highway-Roe Highway interchange to a partial freeway to freeway interchange; Upgrading Tonkin Highway between Great Eastern Highway and Roe Highway to six lanes; and A new interchange at Boud Avenue (subject to further funding negotiations). Sea Ports Proposed - construct new port in Kwinana to cater for expected over flow from Fremantle Defered/ Cockburn Sound container and livestock handling facility still in planning and approval stages. State Fremantle Outer Harbour Seeking new n/a - Kwinana Government has started another review of options for project and in the meantime works proposal are to be undetaken to significantly expand the existing port capacity at Fremantle.Source: Colliers International Research Airport Integration of domestic and international terminals, run extensions, new & improved Perth Airport Redevelopment/ Under Con- associated facilities, improvement of access to airport including rail linkage. Work on the Kewdale 2025 Integration struction international arrivals terminal is scheduled for commencement 2012 with completion expected in July 2014.Source: Colliers International Research Colliers International | p. 9
  • 10. research & forecast report | SECOND HALF 2012 | INDUSTRIAL | PERTHOutlook 522 offices inThe ABS reports that on a seasonally-adjusted basis, economic growth in Australia grew 3.7% inthe 2011/2012 financial year, while Deloitte Access Economics estimated Western Australia’s 62 countries ongrowth to be 4.7%. This indicates that the mining boom advantage the Western Australia economyhas had over the other states is subsiding to a degree. 6 continents United States: 147Deloitte Access Economics is forecasting GSP growth of 4.62% in 2012-13. Most of this GSP Canada: 37growth is expected to continue to be driven by investment spending, particularly in the oil and gas Latin America: 19sector, which seems to be minimally affected by continuing global uncertainty. Asia Pacific: 201 EMEA: 118Demand for quality large industrial space remains buoyant, however owing to global economicconditions and the nature of the State’s economic drivers and growth trajectory, demand for space • $1.5 billion in annual revenuefavours short-term leasing deals over longer-term options. New supply is also being inhibited bythe lack of well-serviced large developable lots, which would shield the market from significant • 1.25 billion square feet under managementrental contractions in the event of negative economic developments. • Over 12,300 professionalsGiven the nature of current enquiries and the requirements of current tenants, design andconstruct deals are harder to complete due to difficulties in securing finance for short-term COLLIERS INTERNATIONALcommitments, with banks reluctance to finance at higher loan-to-value ratios (LVRs) on suchdeals. This has left market activity to those who are able to proceed without financing, or at lower Level 19,LVRs. 140 St Georges Terrace PERTH, WA, 6000Syndicates and established private investors are the most active in the current market and are tel 08 9261 6666 FAX 08 9261 6611likely to remain so for the short to medium term, until credit conditions ease.As a result of the expected peaking and slowing in investment spending in the resources sector,Colliers International is expecting the industrial market to experience minimal growth in the short DIRECTORto medium term. Rents, capital values and land values are generally expected to remain stable,barring major disruption to investment spending levels. John Del Dosso Director I Valuations & Advisory Services tel 08 9261 6648 FAX 08 9261 6688 MANAGER Michael Knight Manager I Research & Urban Economics tel 08 9261 6675 FAX 08 9261 6688 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. 10www.colliers.com.au/research