Brisbane Airport Corporation has work under way or approved on nine commercial developments worth $150 million as it pushes on with expanding new precincts across its holdings, according to Brisbane Airport general manager of commercial business, John Tormey.
Work would start on another three buildings by the end of the financial year making it one of the most active developers in Brisbane, Mr Tormey said.
The property projects are on top of the airport’s 10-year $3.8 billion infrastructure program that includes a new parallel runway to be built by 2020 and terminal expansions.
“The property portfolio is a significant business due to the large land holding,” Mr Tormey said.
It was the biggest airport site in Australia at 2700ha with about 490ha that could still be developed, he noted. “We have committed 20ha for development over the last year.”
Mr Tormey said Brisbane saw 22 million passengers a year, about half that of Miami’s airport, but had almost twice the amount of commercial development.
The airport, owned by a group of institutions and super funds including QIC, Colonial First State, Amsterdam Airport Schiphol, and IMF Infrastructure Funds, controls 33 properties worth $1.137bn including offices, retail, hotels, industrial and car parking.
It is understood the airport had looked at spinning off its property holdings into a trust, however had decided it would retain the assets as investments.
Its BNE Property division, which oversees the airport real estate, was talking to potential joint venture partners for a $400m Auto Mall precinct that would include a test track, designed by racing champion Mark Skaife, dealerships, and manufacturers and automotive related businesses, Mr Tormey said.
“We are still looking at new precincts (for development).”
New $150m five-star Pullman and 3.5-star Ibis hotels totalling 400 rooms are also being developed at the airport by Scott Flynn Properties and Flynn Property Group, and are due to open next year.
Mr Tormey said industrial, retail and leisure development were some of the major opportunities for the land.
“It’s part of Brisbane’s industrial heartland that stretches to Pinkenba,” he said.
The airport, which already has nearly 18,000 public car spaces, was building another 2500 new bays and investigating the development of another up to 5000 spaces, Mr Tormey said.
Brisbane’s CBD has a total of about 26,000 car spaces, he noted
He said the 80,000sq m of airport office buildings had a 2.5 per cent vacancy rate in an overall Brisbane leasing market that has been hit by the resources downturn and where vacancies were above 15 per cent.
“We are presently finalising an office lease that will reduce the vacancies to less than 1 per cent.”
Mr Tormey, who is a former managing director of JLL in Queensland, said property markets may still see a marginal tightening of yields due to the returns on offer in Australia compared with other countries.
Originally Published On: http://www.theaustralian.com.au/