Industrial and logistics property has remained one of the few corners of the commercial real estate market to ride through the disruption of the pandemic relatively untouched.
Demand for logistics space, particularly in Brisbane, has been underpinned by several structural demand drivers, including a fast-growing e-commerce sector and resilient domestic consumption.
In Queensland, e-commerce logistics distribution and warehousing have shown strong growth of 5.2 percent annually, the highest of any state nationally.
Last week, Singaporean property fund manager Mapletree finalised the purchase of 36 hectares of industrial land on Brisbane’s outskirts in a deal worth $90.7 million.
The site, which was sold by Brisbane-based developer Pointcorp, will now form part of the proposed $1.5 billion, 157-hectare Crestmead Logistics Estate, located on the corner of Green and Clarke Road south of the Logan Motorway corridor in Brisbane.
The site for the nine-stage estate, which is mooted to deliver 650,000sq m of warehousing, business, logistics and manufacturing buildings, was amalgamated over a five-year period by Pointcorp.
The site will now be developed into the Mapletree Logistics Estate with construction commencing and delivery expected last quarter 2021.According to a recent report by Colliers International, Brisbane’s industrial sale and leaseback transactions have continued to strengthen throughout the pandemic, reaching $272 million between January and September 2020.
“Industrial assets in the Greater Brisbane region have consolidated as a defensive and mainstream investment during the pandemic,” Colliers International associate director of research Karina Salas said.
“Over the past 10 years to December 2019, industrial sales volumes comprised an average of 21 percent of the volume of commercial property sales within the region.
“Over the past three quarters to September 2020, this contribution has increased to 63 percent, driven by its appeal as a defensive asset class during the pandemic.”
Last month, Mapletree secured 55,000sq m of space at the Acacia Ridge distribution centre on Bradman Street, which was sold on a sharp 5 percent yield by Blackstone for $114 million.
The Acacia Ridge Business Park lies within an established industrial precinct, about 13 kilometres south of the Brisbane CBD, and was previously known as the Fox Road Industrial Estate.
One of the key factors in favour of the Acacia Ridge precinct, according to Mapletree, was its existing transport infrastructure, but also connectivity to forthcoming projects, especially the inland freight rail connecting Melbourne and Brisbane.
Also, bolstering investment has been the delivery of Brisbane Airport’s second runway and improvement works to the Port of Brisbane.
The Acacia Ridge deal follows Blackstone’s divestment of another 18-hectare site within the same industrial park to ESR for $90 million in early October.
Stockland and joint venture partner Fife Group also moved to secure a 21.25-hectare industrial development site in Brisbane’s south for $41.5 million.
Also in Brisbane, an industrial asset at 37 Gravel Pit Road in Darra was acquired following a capital raising by Trilogy Funds Management, which saw investors put $18 million into the Trilogy Industrial Property Trust within one week.
Trilogy’s latest Darra purchase, 17.6 kilometres south-west of Brisbane city, marks the trust’s first industrial property purchase in Brisbane, taking the total value of its property portfolio to almost $70 million across seven properties.
Earlier this year, Mapletree Logistics Trust snapped up a newly-built A-grade logistics facility at 114 Rudd Street, Inala for $21.25 million.
The warehouse, completed at the beginning of the year, will be taken by Decina Bathroomware after agreeing to a 10-year lease.
Last year, Australia’s most successful logistics real estate player, Goodman Group, completed the largest parcel facility and delivery centre in the southern hemisphere for Australia Post.
Covering almost 10 football fields at Goodman’s Redbank Motorway Estate in the City of Ipswich, Queensland, Australia Post signed a 15-year lease on the 13.5-hectare site and invested more than $200 million in the new hub.
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