INDUSTRIAL INTEL. QUARTER NT. QLD. WA. SA. NSW. VIC. CLICK ON MAP

Transcription

1 INDUSTRIAL INTEL. QUARTER CLICK ON MAP NT. QLD. WA. SA. NSW. VIC.

2 36min to Gold Coast Airport SITE 5 FUTURE WEMBLEY ROAD INTERCHANGE UNDER CONSTRUCTION SITE 6 SITE 4 28min to Brisbane Airport SITE 1 SITE 2 BRISBANE INTEL. BY MARK CLIFFORD & CHRIS WRIGHT VACANCY FALL WAS DRIVEN BY IMPROVEMENT IN THE MARKET, DOMINATING TAKE-UP. Total vacant space reduced by 3.3% over the quarter, and down by 18.9% over the past 12 months, as tenant demand continues to show steady improvement. The quarter was relatively quiet with belowaverage take-up of 55,93 sqm (82% of which was in secondary space) outweighing new additions to available space of 38,12 sqm. A 16,218 sqm new speculative construction start at Lytton resulted in speculative available space increasing by 15% over the quarter to 79,673 sqm. Tenant enquiry over the last quarter has been limited with few noteworthy leasing deals negotiated. Whilst there are a number of larger tenant briefs circulating in the market the gestation period of these transactions is stretching out. This could however favour those landlords with existing facilities or development opportunities ready to go as stock has slowly been taken up and vacancy falling. There is still large amounts of capital circulating in the market looking for investment stock however the availability of these opportunities is becoming increasingly rare. Development sites and vacant land are in high demand and low supply, which has been reflected in the premium sale rates of a number of sites. With the general optimism in the market we feel that Brisbane industrial has not yet reached its peak of the cycle and discerning purchasers will see the benefit of this over the remaining course of the year. sqm available space Jan-1 Jul-1 series average Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 FIGURE 2 sqm prime versus secondary space Anton Road, Hemmant 32 & 54-54A Bonemill Rd, Runcorn 45 Rosedale Street, Coopers Plains Size 13.4 ha Size 16.2 ha Size 1,33 sqm Ben Hatch & Greg Russell Mark Clifford & Christian Sandstrom David Knox & Lachlan Hateley 115 Rudd Street, Richlands 321 Doherty Street, Brendale 9/35 Paringa Road, Murarrie Size 2 ha Size 1,25 sqm Size 694 sqm Price $3,5, Price $1,3, Price $1,95, Purchaser OPD Purchaser Private Purchaser Insurance Aid General LOGAN MOTORWAY FUTURE INDUSTRIAL STODDART TOLL GATEWAY MOTORWAY D D D HANA LOGISTICS CEVA WEMBLEY ROAD ROD GOLLEDGE DRIVE GILMORE ROAD BARDON ROAD Wembley Business Park, Berrinba 22 Clinker Street, Darra 31 & 41 Inghams Place, Hemmant Size 3, to 2, sqm Size 2,338 sqm Size 8, sqm & 12,1 sqm Mark Clifford, Sam Harper & Matthew Williams Sam Harper & Mark Clifford Chris Wright & Ben Hatch B/5-7 Radius Drive, Larapinta 24 Blanck Street, Ormeau 2 Enterprise Place, Yatala Size 12,14 sqm Size 5,13 sqm Size 1, sqm Rental $1,3, net p.a. Rental $5, net p.a. Price $135, net p.a. Tenant Mainfreight Tenant Probiotics Australia Tenant GL Events

3 SYDNEY INTEL. BY MATTHEW LEE WE REMAIN IN A VERY STRONG MARKET BUT TRANSACTION VOLUMES, BOTH AND, ARE DOWN ON PREVIOUS YEARS. Sydney industrial available space (5, sqm+) remained steady with a 2.2% decrease, to measure 371,863 sqm, still remaining well below the series average of 627,145 sqm. Gross take-up measured 147,69 sqm which is in line with historical averages Future speculative supply is strong with over 15, sqm being tracked for delivery in the next 12 months. As we move swiftly through the second quarter, the industrial market in NSW remains buoyant. From an investment perspective we have seen Continued demand for NSW product balanced by historically low volumes of stock and completed transactions. The net result has been strong pricing across the full spectrum of investment grade assets. The leasing market in NSW continues to perform strongly. Large scale pre-lease requirements continue to flow through the market with groups such as ASICS, Costco and many others either in the market currently or having concluded deals. Speculative development remains a major element in the current market conditions with Stockland, Goodman, GPT and Charter Hall all delivering product in 218/19. Leasing statistics in the speculative space have been strong which has been driven primarily by 3PL and other short lead time requirements. From an existing building perspective we are seeing consistent absorption across all markets but a slight extension in average time on market. One of the emerging trends in the existing space has been renewed interest in secondary locations an example can be seen in the take up of Yennora distribution centre for Stockland. Arguably the strongest performing sector has been land. Demand for land has been insatiable across Sydney with land prices reaching unprecedented levels in virtually all regions. This strength has resulted in a number of land subdivision projects as well as speculative development as referenced above. We see no signs of this segment slowing down despite the onset of Badgerys Creek and associated land. sqm available space by quality Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 TOTAL AVERAGE U2, 153 Beauchamp Road, Matraville 23A Nyrang Street, Lidcombe 1 Crescent Street, Holroyd Size 966 sqm Size 2,598 sqm Size 9,471 sqm Mark Silva & Alex Sarroff Matthew Lee & Peta Antoniou Tim Armstrong & John Swanson 44 Clunies Ross Street, Greystanes U1, 2-28 Ricketty Street, Mascot 5 Annette Avenue, Ingleburn Size ha Size 462 sqm Size 594 sqm Price $61,, Price $2,7, Price $5, Client Boral Client The Murray Family Client Campbelltown City Council D D D 1B Huntingwood Dr, Huntingwood U 8, 153 Beauchamp Road, Matraville Stanley Road, Ingleburn Size 11,26 sqm Size 1,623 sqm Size 825 sqm Tim Armstrong, John Swanson & Peta Antoniou Mark Silva & Alex Sarroff Nick Trencevski & Terry Hassan 5 Parkview Dr, Sydney Olympic Park 7-9 Yato Road, Prestons 2-6 Burrows Road, Alexandria Size 4,351 sqm Size 2,965 sqm Size 1,5 sqm Rental $75,548 net p.a. Rental $382,485 net p.a. Rental $15, net p.a. Tenant Data Exchange Tenant Hume Plasterboard Tenant Ren Australia Management

4 MELBOURNE INTEL. BY GAB PASCUZZI STRONG TAKE-UP IN FIRST QUARTER, DRIVES VACANCY TO ITS LOWEST LEVEL IN FOUR YEARS. Total vacant space in Melbourne s industrial market declined by 2.8% over the quarter, and by 18.3% over the year. Prime vacancy fell by 11.6% over the quarter, while secondary vacancy grew by 11%. Vacancy additions over Q1 218 were dominated by secondary space, at 67.6%, as tenants upgrade into prime space or relocate into purpose-built facilities. Total available speculative space fell by 37% to measure 71,873 sqm, led by strong take-up of speculative space and a shortage of new supply. The second quarter of 218 sees the fall in vacancy underpinned by a growing demand for industrial, particularly from the e-commerce and transport and logistic sectors, and vacancy additions. Given strong economic conditions in Victoria, including rapid population growth, there will be an ongoing demand for core individual assets from both domestic and offshore investors. Additionally, Melbourne s industrial precincts, particularly the West and North, stand to benefit from a number of major transport infrastructure projects, which will improve connectivity within industrial precincts. The investment market continues to have limited stock on offer, which indicates further scope for yield compression over the next 12 months in both the prime and secondary markets. sqm available space Apr-13 Historical Average Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 NORTH EAST SOUTH EAST WEST CITY FRINGE Apr-18 FIGURE 2 No. of buildings by size and quality ,-5,999 6,-6, ,-7,999 8,-8,999 9,-9,999 1,-1,999 11,-11,999 12,-12,999 13,-13,999 14,-14,999 15,+ Key Appointments Radford Road, Reservoir 8 Parsons Street, Springvale 7/53 Duerdin Street, Notting Hill Size 5.23 ha Size 1,954 sqm Size 1,7 sqm Brent Glassford & Marco Sandrin Steven Salopek & Stuart Gill Stuart Gill & Steven Salopek 6-1 Pipe Road, Laverton North 44-8 Sinclair Road, Dandenong 1/13 Advantage Drive, Dandenong Size 15,319 sqm Size 1.5 ha Size 3,731 sqm Price $15,1, Price $4,, Price $4,95, Client Austco Client Private Client Elite Property Group D D 15 Berwick Road, Campbellfield 7 Chifley Drive, Mentone 59 Calarco Drive, Derrimut Size 4,35 sqm Size 9,529 sqm Size 6,5 sqm Marco Sandrin & Brent Glassford Stuart Gill & Adrian Garvey Tony Tripodi & Joel Davy 18-2 Nellbern Road, Moorabbin 26 Hume Highway, Craigieburn U4 & 5, Cyanamid Street, Laverton Size 1,579 sqm Size 3,151 sqm Size 7,116 sqm Price $2,54, Rental $43, net p.a. Rental $62,735 net p.a. Purchaser ABU Constructions Tenant IPLEX Landlord 151 Property

5 ADELAIDE INTEL. BY GARRY PARTINGON S TO SITTING TENANTS HAVE BEEN PREVALENT AND IS EXPECTED TO CONTINUE AS THE COST OF CAPITAL WILL BE REDUCED DUE TO THE PHASE OUT OF STAMP DUTY. Development and land activity has mainly been driven by the defence industry. In the past 6 to 12 months, the defence industry has spent approximately $42 million purchasing properties (mainly vacant land) in Osborne. Recent leasing demand has increased, especially in the Inner North precinct. In addition, the announcement of the much anticipated defence contract has boosted the level of enquiry in the leasing market, as there are few tenants that require larger sites. The growing tendency for tenants to become owner occupiers continues, facilitated by the relatively low cost of capital and the progressive phase out of stamp duty on commercial transactions. We have witnessed increased owner occupier activity emerging in the Adelaide Industrial market, with high availability and sluggish tenant demand boosting vacant possession sales. Obsolete properties are providing the opportunity for development, prompted by rezoning, gentrification and aged improvements. Adelaide is continuing to appeal to the national institutional funds for assets which exceed $15 million, with prime yields across the eastern seaboard generally in excess of 1 basis points firmer than Adelaide. The last industrial sale above $15 million achieved a market yield of 7.38% (6-1 Senna Road, Wingfield), which sold fully leased to GPC Asia Pacific (trading as Repco), a foreign-owned private company, with a lease term certain of 8.4 years. Of note, however the leasing market has remained lethargic, with sluggish rental growth continuing to be a factor across all industrial precincts. Average industrial rents remain generally unchanged in both the Outer North and Outer South markets. Within inner metropolitan areas, average prime face rents decreased by -4.3%. The Inner West and Inner South were the primary contributors to the fall. Downward pressure on rents in the Inner West and Inner South has resulted from a combination of changing tenant trends and the existing level of stock available across the market. Tenants which are not anchored to their current location by the necessity for access to the airport, or the requirement for a showroom component, have the option of comparably cheaper rents available in the Inner North at an average of $87/sqm p.a. net and Outer North at an average of $68/sqm p.a. net. The growing tendency for tenants to become owner occupiers continues, facilitated by the relatively low cost of capital and the progressive phase out of stamp duty on commercial transactions. The final phase of the stamp duty reduction will commence at the end of the current financial year. After the final stamp duty reduction, there will be no stamp duty from 1 July 218 applicable for commercial property. Other notable projects include the recent decision by the Federal Government to upgrade the Osborne shipbuilding facility, and to establish a naval shipbuilding college to provide confidence for shipbuilding in South Australia going forward. Over $1 billion in infrastructure upgrades has been earmarked for the site. This is likely to have a positive influence in demand for industrial property in the surrounding north western and northern areas PROSPECT ROAD CHURCHILL ROAD 8 Cromwell Road, Kilburn Size 5,532 sqm Garry Partington 3 Cromwell Road, Kilburn Lot 2 Middle Beach Rd, Two Wells Size 25,98 sqm Price $2,65, Size 1.82 ha Price $1,5, Client Private Client Private D Moss Road, Wingfield Size 9,828 sqm Tenant Recochem Churchill Road N, Dry Creek 1-5 Nelcebee Street, Osborne 1/14 White Road, Gepps Cross Annual Rental $285, net Size 2, sqm Size 1.8 ha Price $1,, Size 1,391 sqm Rental $9, net p.a. Garry Partington Garry Partington Client Private Tenant Bulivants Pty Ltd

6 PERTH INTEL. BY JARRAD GRIERSON THERE HAS BEEN A SMALL DECREASE IN THE OVERALL VACANCY DUE TO SOME POSITIVE ABSORBSION, AS WELL AS REDUNDANT STOCK BEING TAKEN FROM THE MARKET. We have seen a reduction in the total vacancy, from a high of 695, sqm in late 217, to approximately 65, sqm at the end of Q This has come from an increase in general leasing activity, coupled with redundant stock being removed from the market. Investor demand remains strong placing downward pressure on prime yields. There is increased demand from eastern-state based groups who believe Perth is at the bottom of the leasing cycle and seeing Perth as good value compared to the eastern seaboard markets. The first quarter of 218 has seen an increase in enquiry levels and improvement in market confidence. The bulk of the enquiry continues to come from both the mining services and warehousing and logistics sectors. Prelease activity has been minimal as existing stock has satisfied tenant demand. Rents continue to fall and incentives increase as motivated landlords attempt to attract tenants. With the reduction in premium and A-grade stock, rents are expected to stabilise, particularly for existing quality buildings. Rents for secondary buildings could continue to fall. From an investment perspective, demand for good quality and well leased investment property remains high against the backdrop of low levels of available stock, placing downward pressure on prime yields. Properties with short lease terms continue to be viewed with caution due to the uncertainty of the leasing market. Demand for land remains steady, with demand mostly from owner occupiers with the opportunity to buy land at a discount to historical values. sqm prime versus secondary space Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 FIGURE 2 No. of buildings by size and quality ,-3,999 4,-5, ,-7,999 8,-9,999 1,-11, , Great Eastern Hwy, Ascot 32 Welshpool Road, Welshpool 18 Integrity Way, Wangara Size 91 sqm Size 9,539 sqm Size 3,669 sqm Jarrad Grierson & Geoff Thomson Jarrad Grierson & Geoff Thomson Sam Hammond 8 Keegan Street, O Connor 42 Truganina Road, Malaga 41 Hope Valley Road, Naval Base Size 11,16 sqm Size 3,59 sqm Size 3,3 sqm Price $8,75, Price $4,, Price $3,68, Tenant Ausco Client Private Client Apprenticeships Australia D D D 41 Bushmead Road, Hazelmere 66 Prindiville Drive, Wangara 25 Cocos Drive, Bibra Lake Size 4, sqm Size 6,379 sqm Size 8,68 sqm Geoff Thomson Sam Hammond Geoff Thomson 47 Hope Valley Road, Naval Base Abernethy Rd, Kewdale 7 Craft Street, Canning Vale Size 4, sqm Size 6,593 sqm Size 3,314 sqm Rental $338, net p.a. Rental $566,115 net p.a. Rental $265,12 net p.a. Tenant Ausco Modular Tenant Australian Postal Corp Tenant Ox Engineering Pty Ltd