Brisbane Commercial & Industrial Property Market Review - August 2023
“A huge increase in new construction has been taking place as Brisbane currently accounts for 60% of the nation’s new industrial supply pipeline.”
The take up of industrial space remains high in 2023 with the majority of take up observed in pre-committed space, highlighting the lack of available existing space on the market. A huge increase in new construction has been taking place as Brisbane currently accounts for 60% of the nation’s new industrial supply pipeline, however this new supply is being absorbed just as quickly with effectively all new speculative warehousing being committed prior to completion.
High construction costs and rising interest rates appear to be stabilising land values at around $500/sqm for smaller blocks (<1 Hectare) and around $400/sqm for larger sites.
Intense competition among tenants is continuing to fuel rental price growth with prime assets now leasing for $150/sqm face net, this rental growth is expected to continue at a rate of approximately 15% for 2023 and remain strong in 2024 before easing in 2025.
Interest in industrial investments remains high and although rising interest rates have softened prevailing yields, increasing rental rates have prevented any correlating drop in capital values.
John Andrew, FAL Property Group