Land values in Brisbane’s industrial market are continuing to grow due to the high take-up of land and relatively few additions of new serviced lots into the pipeline, according to Knight Frank.

The company's Brisbane Industrial Market Overview March 2019 found land values for industrial properties of one to five hectares grew by 5.8% over the past year to reach $294/square metre, while properties of less than 5000 square metres increased in value by 6.4% to reach $377/square metre.

Knight Frank Partner and Joint Head of Industrial Queensland, Chris Wright, said the fastest-growing prices for industrial land remain in Brisbane’s TradeCoast and South East precincts.

“The TradeCoast has long held the highest land values due to its proximity to the Brisbane CBD and major roads, port and airport, and over the past year there has been further growth of 10.5 per cent for smaller and 8.5 per cent for larger lots,” he said.

“The South East precinct has rebounded from a period where its values lagged the other southside markets. 

“With two year total growth of 25% for small and 34% for larger lots, the construction activity and absorption of available sites has seen the South East back on a par with the South and South West precincts with small lots ranging between $310 to 330 per square metre and one to five hectare lots at $275 per square metre.”

.Knight Frank Partner and Joint Head of Industrial Queensland, Mark Clifford . Source: Knight Frank

Knight Frank Partner Research and Consulting Queensland and report author Jennelle Wilson said buildings of scale had accelerated land take up leading to value growth, and high pre-commitment activity would spur construction in 2019.

“Take up of speculative space was strong in the second half of 2018, with available space falling to 55,838 square metres from a recent high of 97,553 square metres," she said.

“Continued speculative development is expected for this year – confirmed spec accounts for 14% so far, with the potential to increase – and supply overall is expected to almost double this year over 2018 levels.”

Mr Wright said the focus in Brisbane’s industrial land market was now back on large mega-lots for future development.

“The major domestic institutional owners have continued to scout the market for land opportunities, turning to infill sites and brownfield opportunities, with some transactions of large raw land parcels emerging,” he said.

Knight Frank Partner and Joint Head of Industrial Queensland, Mark Clifford said steady demand and modest supply completions during 2018 has brought vacancy in Brisbane’s industrial market down by a further 14 per cent over the past year and under average levels for the first time in five years.

“There has now been two years of steady, if modest, rental growth in the Brisbane market,” he said.

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