Industrial Property Set to Surge

Industrial Vacancy Rates are fallingThe Queensland economy may be slow to recover from all its natural disasters. But it’s Industrial property sector has been quick out of the blocks.

The boom in Queensland gas now has Brisbane with the lowest vacancy rate for Industrial property.

Next comes Melbourne — with Sydney well back in 3rd place, according to a recent survey by Knight Frank.

And increasing demand will put further upwards pressure on rentals … thereby, encouraging more developers into the market.

The Melbourne Industrial scene is showing growth across a balanced tenancy mixWhile the Brisbane market is gas-driven … Melbourne (which is Australia’s largest industrial market) enjoys a much wider tenant profile.

As such, its increase in speculative A-grade buildings has been readily absorbed, over the past 12 months.

Sydney, however, his languished somewhat — with a cautious market showing an even split in the take-up, between A & B grade facilities.

Bottom Line: Industrial property is poised for some good rental and capital growth over the next few years, as yields start to firm.

But given the relatively short construction period involved, supply levels can quickly change. Therefore, make sure you keep a close eye on adverse interest-rate movements down the track — as this can effectively dampen demand very quickly.


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