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Demand For Industrial Property Drives Building Approvals North

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DEMAND FOR INDUSTRIAL PROPERTY DRIVES BUILDING APPROVALS NORTH

trial building approval values grew by more than 15 per cent in the year to February 2018. Photo: Supplied

Unprecedented demand for warehouses and a renaissance in some areas of manufacturing have driven industrial building approvals through the roof.

The increasing reliance on online shopping from traditional retailers, as well as the rise of online-only e-tailers like Amazon, have pushed up demand for distribution centres, especially in locations linked to key motorways and transport hubs.

Many investors are looking north to Brisbane for better returns, as Sydney becomes more land-constrained and yields continue to tighten.

More than $535 million worth of approvals were granted nationally for industrial developments in February alone, the latest Australian Bureau of Statistics data, released on Wednesday, shows. That figure had surged by more than 100 per cent from the previous month.

Total industrial property, including factories and warehouses, recorded an uplift in approval values of more than 15 per cent in the 12 months to February 2018 – the strongest growth across the commercial asset classes.

DEMAND FOR INDUSTRIAL PROPERTY DRIVES BUILDING APPROVALS NORTH
Leda Holdings has paid $36 million for a 1.85-hectare industrial site in Sydney’s Banksmeadow. Photo: Supplied

AMP Capital chief economist Shane Oliver said the strong interest in the industrial property sector “comes back to e-commerce activity”.

“I think rents are rising very strongly so that’s encouraged a pick-up in approvals for industrial complexes or warehouses.”

While most industrial construction approvals were for warehouses, it was factories which saw the most dramatic uplift in approval values, with year-on-year growth of 117 per cent – with a 300-per-cent surge from January to February.

Colliers International’s head of industrial research Sass J-Baleh said the Australian food manufacturing and cold storage sectors have and will continue to see strong growth in the next few years, thanks to expansion in the food sector.

“It is important to note that there are many sub-sectors within the overall manufacturing industry and that although historic headline figures have shown an unfavourable trend in manufacturing, there are definitely sub-sectors that have demonstrated recent growth,” she said.

This aligns with the Australian Industry Group’s latest Australian Performance of Manufacturing Index, which hit a record high of 63.1. A PMI above 50 indicates an expansion in overall manufacturing activity.

The value of all non-residential building approvals grew by 4.4 per cent in the 12 months to February 2018 – to more than $3.58 billion worth of approvals. It climbed back by 14.8 per cent in February from the previous month.

Master Builders Australia’s Matthew Pollock expects non-residential building activity to grow by 14.6 per cent in 2018, with an estimated $41.5 billion worth of projects to be completed.

“(The upswing in approvals) confirms the strongest outlook that commercial construction has enjoyed in years and that the long awaited upturn in the sector is underway,” he said.

Brisbane “riding upswing” market

DEMAND FOR INDUSTRIAL PROPERTY DRIVES BUILDING APPROVALS NORTH
An industrial site at 14-26 Commercial Road, Kingsgrove is tipped to fetch about $15 million. Photo: Supplied

Research released by Cushman and Wakefield on Thursday reveals that the volume of investment in industrial property has increased nationally by 38 per cent to $982 million in the three months to March 31.

Cushman and Wakefield’s head of research Dominic Brown said that Brisbane had been the strong performer in the past few quarters, where more investors were looking at the recovery in that market.

The combined three-year investment volume for Brisbane – at $1.1 billion – is at its highest level since the third quarter of 2015.

“In Queensland, it was still in negative territory until about two years ago and it’s only in the past couple of years that it’s returned to positive economic growth,” he said.

“If you think of where pricing is at in the three cities, investors are now looking towards Brisbane as they see it as a growth opportunity, whereas pricing in Melbourne and Sydney have moved forward quite a long way over the past couple of years.”

While Mr Brown’s outlook for Brisbane remains positive, he noted that discrepancies between vendor and buyer price expectations could limit future investment activity.

Sydney has recorded the lowest three-year investment volume of $869 million among the three eastern seaboard capital cities because of limited stock and declining returns.

The highest result was achieved by Melbourne, where $1.2 billion worth of deals went through in the past three years. But the Cushman and Wakefield report noted that transactions in that market “has been largely flat over the past 18 months… due to lack of available stock”.

Despite this, capital values of vacant land in Melbourne shot up 36 per cent year-on-year.

Source: www.commercialrealestate.com.au

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Commercial

Richards family wastes no time with $10m rural property buy

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Richards family wastes no time with $10m rural property buy

Sunnyside, in the Brisbane Valley, comprises 2340 hectares and 27 dams. Supplied

Queensland-based Rich List family the Richards have snapped up a prime grazing property in the Brisbane Valley for  about $10 million.

The dynastic Richards family, estimated to be worth $500 million, is behind the major waste management business JJ Richards & Sons.

The property, on Gatton Esk Road, is one of the Brisbane Valley’s largest cattle properties,  just 60 kilometres from Brisbane’s CBD.

Comprising 2340 hectares, the property has 27 dams and is on the south-eastern side of the Brisbane Valley town of Esk.

Richards family wastes no time with $10m rural property buy
“Sunnyside” Brisbane Valley. Supplied

The property was sold at auction through Ray White Rural’s Jez McNamara, who declined to comment on the buyer.

Land titles records show the property has now settled, with the Richards family buying the property for $10 million, adding another to the family’s collection of rural holdings, which include a 600-hectare holding near Stanthorpe.

The property also has 800 hectares of cultivation traditionally used to grow watermelons and pumpkins, making it ideal for further development for fodder crops or improved pasture.

And neighbours need not be concerned about the confluence of the family’s day job. The property will not be used for any waste management initiatives and solely as an agricultural enterprise.

Source: www.afr.com

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Commercial

Dexus Snaps Up Brisbane Audi Centre for $91.2m

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Dexus Snaps Up Brisbane Audi Centre for $91.2m
Property giant Dexus has purchased the Audi Centre and the Euro Marque complex in Fortitude Valley in Brisbane’s inner north.

Dexus has paid $91.2 million for the property located at 570-586 Wickham Street, realising an initial 6 per cent yield.

The property comprises two adjoining, purpose-built automotive dealerships known as Lighthouse, constructed in 2011, and the Euro Marque building, built in 2006.

The 7,123sq m site has been home to high-end brands such as Audi, Lamborghini, Maserati and Bentley.

Currently, the property features 13,288sq m of office and showroom space across two levels and a hardstand and external area of 2,556 square metres.

CBRE’s Mike Walsh, Peter Court and Tom O’Driscoll, in conjunction with Glen Wright and Nick Spiro of Cushman & Wakefield, were appointed to market the 570-586 Wickham Street property.

Walsh described the deal as a “landmark transaction” for Brisbane’s fringe market.

Nine offers were reported from local and offshore property companies eager to maximise the site’s underlying value.

The site has attracted strong interest due to its future development potential of up to 20-storeys.

An important part of the deal was the lease recommitment last year by the ASX-listed Autosports Group to the end of 2026 plus two five-year options.

Dexus, Australia’s largest landlord, will now collect a net passing income of $5.472 million a year.

Source: theurbandeveloper.com

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Commercial

Clarence Property Buys Brisbane Shopping Centre for $31.25m

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Clarence Property Buys Brisbane Shopping Centre for $31.25m
Property funds manager Clarence Property’s unlisted Westlawn Property Trust has acquired The Zone Shopping Centre at Underwood for $31.25 million.

The 2.85-hectare retail complex is home to national retailers including OfficeWorks, Rebel Sport and Good Price Pharmacy.

Located on the corner of Compton and Kingston roads, the centre benefits from a high-profile position in a high growth catchment between Brisbane and the Gold Coast.

This is the sixth acquisition for WPT, with other commercial and retail assets purchased in Hamilton, Spring Hill and Northgate totalling $34.74 million since October 2017.

Clarence Property managing director Peter Fahey marked Underwood as a good fit for WPT, which has more than $250 million in assets between Yamba and the Sunshine Coast.

“Our target asset allocation for WPT is about 30 to 45 per cent retail, with a focus on high yield neighbourhood shopping centres in growth regions,” he said.

Clarence Property’s flagship unlisted Westlawn Property Trust is also offloading a retail centre in Robina with a price tag of $30 million.

Located on a 20,407sq m in Robina, the centre is currently 94 per cent occupied and delivered an 18.6 per cent return to investors in 2017.

Source: theurbandeveloper.com

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