Stockland has secured a major blue chip tenant for part of its 11-hectare industrial business park in Warwick Farm, with the remainder of the property set to be speculatively developed to meet leasing demand for opportunities in close proximity to the M5 and M7 orbital.
Daikin Australia has signed a 10 year lease 33,278sqm of Gross Lettable Area, at 200 Governor Macquarie Drive, with occupation set for early 2018.
Darren Curry, director of industrial and business services at Savills Australia said Daikin Australia plans to use the Stockland development to cater for the expansion of their current site, located at 62-66 Governor Macquarie Drive. The new lease will cater for predominately office, warehousing and the wholesaling of Daikin products to trade services.
Stockland purchased the property from the Australian Turf Club in 2013, it being originally used as a horse training facility known as ‘Coopers Paddock’. 200 Macquarie Drive is opposite the new Inglis thoroughbred horse stables and sale yard, who will relocate from their Randwick stables to Warwick Farm. In addition, Inglis is developing a conference centre and hotel that will be run by the Sofitel MGallery.
Brisbane industrial land supply dries up in the south west
The prime south west corridor in Brisbane is experiencing shortage of large lot land supply, particularly for sites larger than 5ha and those with immediate access to the Logan, Ipswich and Gateway / M1 Motorways.
“We are now heading into single digit opportunities of available large lot land sites to develop,” said Matthew Frazer-Ryan, national director of industrial at Colliers International.
“This is leading to the increase in land values and driving occupier requirements further south to Yatala or further west to Ipswich, which is helping grow and develop these districts.”
According to Colliers International research, Brisbane industrial land values for 2.5ha serviced land lots have increased on average 16% over the last financial year, from $253/sqm in 2015/16 to $294/sqm in 2016/17.
Mr Frazer-Ryan added: “Occupiers and developers in these precincts are now planning up to ten years ahead and looking for sites to build on that are situated adjacent to existing transport nodes or future road network upgrades.
“They are land-banking to secure their future industrial footprint. Some of these occupiers who have less flexibility in choosing a location are also now starting to look at brownfield sites that provide short to medium term income, and that can become available for future redevelopment in lieu of the traditional land-bank strategy.
“Limited stock of quality warehousing facilities has meant that on the leasing front we are experiencing a flight to quality, with occupiers moving from older and less efficient facilities into modern A Grade facilities.
“Additionally, tenants are taking up space in the brand new spec developments providing easy access to major road networks and associated infrastructure.
“Considering existing A Grade facilities are tightly held in this precinct, the demand for design and construct product will increase, ensuring those developers that have landbanks leverage this benefit in the foreseeable future.
“Demand and take-up in the South and Logan Motorway corridor has been more subdued YTD, however ongoing negotiations for a series of new commitments are forecast to be completed in the coming quarter, and rebalance the take up across the southern market.”
Overall, the industrial market in Brisbane has experienced significant leasing activity in the first half of this year, particularly within the TradeCoast region with Colliers International research showing over 100,000sqm of leasing transactions (for warehouses 5,000sqm and above for YTD 2017) occurring.
Research shows prime grade net face rents in the Australia TradeCoast precinct increasing 3.11% over the YoY to June 2017.
Driving growth for industrial product in the Australia TradeCoast precinct is the significant investment in infrastructure projects underway including the duplication of the runway at Brisbane Airport and the upgrading of Kingsford Smith Drive, which will help improve the productivity of the region.