Raine and Horne Commercial

7 | INSIGHTS SPRING 2018 Joseph Grasso of Commercial Brisbane Southside & Bayside says rising values of industrial land in Brisbane are helping to push up the values of older stock. “There is a lack of industrial subdivisions in Brisbane and we are starting to see buyers pay strong prices for secondary stock delivering healthy yields,” notes Joseph. As a guide to the buoyancy of Brisbane’s market, Raine & Horne Commercial Brisbane Southside & Bayside recently sold a 35-year old industrial asset at Slacks Creek in the Gold Coast corridor for $1,138,000 on a low yield of 6.3%. “It was remarkable,” explains Joseph. “We had eight interested parties competing for the property – the first offer came in at just over $1 million, yet we only placed one online advertisement for the asset.”Although Joseph believes interest is especially strong in the sub- $2 million market, Raine & Horne Commercial Brisbane Southside & Bayside recently sold a secondary industrial property in Coopers Plains for $2.925 million on a yield of 7.13%. “Again, this was an older style tilt panel building of 955 sqm of gross floor area (GFA) on 5,279 sqm of land. While it was well located it had just over two years left to run on its current lease term, highlighting the strength of the market even for older style properties,” adds Joseph. According to Joseph several factors are combining to drive a “real appetite” for commercial assets in Brisbane. “Low interest rates are forcing investors to seek higher returns, and this is boosting competition between buyers. Rising land values are lifting the price of older stock, and in addition, we are seeing an intergenerational transfer of assets. Many younger beneficiaries are wanting to cash in on commercial assets they have inherited, rather than hold onto them.” Joseph describes Brisbane as a seller’s market at present, saying, “I have never seen assets yields as compressed as they currently are, and it’s largely due to low interest rates and a lack of supply in tightly held areas.” FEATURED | Brisbane Southside Joseph Grasso Brisbane Southside & Bayside Spotlight on Brisbane Markets