The Brisbane Industrial market has had a strong start to the year with a number of new leases being finalised in late 2016 and into 2017 for existing buildings and new buildings.
This increase in activity has been telling in regard to value with Australian Trade Coast and the Logan Motorway precinct seeing a rebound in net face rents after declines over the past few years. In contrast is the continued reduction in rents in the Southern precinct. We have witnessed owners being more realistic and accept lower face rents rather than the consequence of vacancies which has hampered this market over the last few years.
The first ten months of the 2016/2017 financial year has resulted in approximate 180,000sqm being leased in the Brisbane Industrial (over 5,000sqm) market. This is ahead of the same period last year where demand for stock totalled 162,000sqm. This period has continued the trend which emerged over the 2016 calendar year regarding tenant type. Greater enquiry and subsequent leasing take-up has improved in the Manufacturing sector which just 18 months ago had close to halted making way for the Transport and Logistic users. Now as many of these Logistic use have seen large scale relocations, we have now reverted back to these other segments of the market and a move to greater activity in consumables. Consumer facing tenants including Construction and Automotive together with the Manufacturing types now represents close to three quarters of new large tenancies.