BRISBANE Brisbane prime industrial market indicators South North Trade Coast Yatala Net face rent ($ sqm) 133 140 150 120 Incentive (%) 13 11 12 14 Yield (%) 4.7 4.7 4.6 4.8 Capital value ($ sqm) 2,830 2,978 3,261 2,500 Occupier demand for industrial property across Brisbane was strong last year with gross take-up exceeding 900,000 square metres. Net absorption reached around 710,000 square metres during 2022, which is around two-to-three times the long run average. Enquiry has been very strong across the South, South East, South West, North and the Trade Coast. Certainly, rising interest rates are pushing some would be owner occupiers into the tenant pool as is the limited options for owner occupiers to purchase. Demand is coming from a broad range of sectors as businesses invest in supply chains. However, the most active groups in the market looking for space during 2022 were transport and logistics, retailers/wholesalers (including e-commerce) and manufacturers. Many businesses are now holding higher inventory levels to guard against supply chain disruptions and would like to take additional storage space if it were available. The strength of net absorption last year easily outpaced rising new completions, firstly lowering the metropolitan vacancy rate to 1.6% at June and then under 1.0% by December 2022, the lowest vacancy since the tail end of the last resources boom 10 years ago. Vacancy rates are extremely low in the Trade Coast and North regions and are so low that they are constraining net absorption across the metropolitan area as a whole. Reflecting the rapid market tightening over the last 12 months, net stated prime rents rose strongly across the regions to sit between, an average of, $120 per square metre at Yatala up to $150 per square metre on the Trade Coast at December 2022, an increase of 13% to 18%. Average prime incentives started to fall notably during 2022, ranging from 11% in the Northern region to 14% in Yatala. Incentives on pre-lease deals can be higher, depending on the developer. Average secondary stated rents demonstrated strong growth as well last year. Leasing market 13 109 Waverley Road, Camp Hill QLD 4152 Industrial Market Monitor | 1st Half 2023
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