Retail trade accounted for 60 per cent of the take up of industrial space in 2021, in line with the surging trend to e-commerce in Australia, while industrial vacancy rates dipped from 2.4 per cent to 2 per cent in Brisbane over the year.
Prime net face rents have increased 2.8 per cent over the past 12 months.
But in the race to secure pre-leases prime incentives have increased alongside this. The average incentive at the end of December was 21 per cent, up 220 basis points over the year.
Consequently, net effective rents have actually dropped 0.2 per cent quarter on quarter.
“In line with the elevated speculative supply pipeline in the Brisbane industrial market, many of the significant occupier transactions for the quarter were in pre-lease market,” J-Baleh said.
“The most significant pre-lease deals in the fourth quarter of 2021 include Winning Appliances at 3270 Ipswich Road, Wacol for 45,740sq m, and Bapcor Limited in Berrinba for 45,000sq m.
“It is expected that larger occupiers will continue to look at speculative developments for their future space requirements as tranches of speculative supply continue to be developed.”
J-Baleh said the decreased land availability in Brisbane had led to significant land value appreciation. Small lots in Brisbane were now priced at about $414 per sq metre, an increase of 8.4 per cent year on year while large lots were averaging $302 per sq metre, an increase of 10.6 per cent year on year.
“Land values are expected to continue to rise as land availability becomes scarce in Brisbane. Particularly in precincts where there is not a great amount of future land development available,” she said.
“However, this in turn will result in a lack of pure land transactions as developers will look to hold on to land offerings to capitalise on the future value rather than dispose of them.”
Australia’s industrial vacancy rates are at an all-time low of 1.3 per cent nationally, down from 6.3 per cent two years ago.
Article Source: www.theurbandeveloper.com