brisbane industrial research forecast report second half 2012

BrisBane industrialReseaRch & FoRecast RepoRt

www.colliers.com.au/research

Demand Broadens Out As New Stock Levels Struggle after the strong influence that the mining and resource sector had on the Brisbane industrial sales and leasing market during the first half, demand for industrial space has become more broadly based during the second half. the current take up of space currently reflects the diverse nature of the Queensland economy. during the half, demand was sourced from logistics, wholesaling, manufacturing and services businesses as well as mining and resource firms. the take up of space (2,000m2 and above) was relatively evenly spread throughout the Brisbane market. leasing volumes have however eased since the first half from 220,000m2 to 87,000m2. While this seems well down, there were some substantial pre-commitments in the first half which boosted that result. notably pre-commitment activity temporarily stalled in the second half.

investment activity for built product worth in excess of $5 million rose during the second half of 2012. While in the six months to March 2012 there were 14 transactions to total over $147 million, during the six months to september 2012, there were 15 transactions that totalled $206 million. Of these, 4 sales were in excess of $20 million.

like the leasing markets, interest for properties was relatively evenly spread across the regions with four sales occurring in the australia tradeCoast and southside and Outer south and three sales in each of the northside and Outer north and Outer south West industrial precincts. One other sale was recorded in the Yatala enterprise area.

second HALF 2012 | industriAL

ael Holdings purchased this facility at 55 Blanck street Yatala in July 2012

*equivalent reversionary Yield** 1 hectare lotsdata correct as of Q3 2012source: Colliers international research

MaRket IndIcatoRs FoRecast - 6 Months

oveRall peRFoRMance

new supply

tenant deMand

IncentIves

Face Rents

capItal values

yIelds

land values

•there were 15 investment transactions over $5 million to total $206 million

•demand for space broadened out to include more traditional users

•another period of very little new speculative stock

key hIghlIghts

BRIsBane IndustRIal MaRket IndIcatoRs

Region gradeaverage net Face Rents ($/m² pa)

average Incentives

average capital value

($/m² pa)

average Market yield*

average land values**

low hIgh low hIgh low hIgh low hIgh low hIgh

atcPrime $110 $120 3% 10% $1,200 $1,600 8.00% 8.75% $275 $375

secondary $80 $110 5% 15% $950 $1,150 8.75% 9.50%

northPrime $110 $120 3% 5% $1,200 $1,600 8.00% 8.75% $300 $350

secondary $60 $90 5% 15% $950 $1,150 9.50% 10.50%

outer north

Prime $110 $115 3% 10% $1,250 $1,450 8.50% 9.25% $220 $250

secondary $75 $95 5% 15% $950 $1,050 9.00% 10.00%

southPrime $95 $115 3% 10% $1,300 $1,500 7.75% 8.50% $250 $300

secondary $65 $95 10% 20% $950 $1,000 9.00% 10.00%

outer southPrime $100 $120 3% 10% $1,300 $1,500 7.75% 8.50% $230 $250

secondary $60 $100 10% 20% $950 $1,050 9.25% 10.00%

outer south west

Prime $100 $120 3% 10% $1,300 $1,500 8.00% 8.75% $225 $250

secondary $60 $100 10% 20% $900 $1,100 9.25% 10.00%

yatalaPrime $105 $115 3% 10% $1,250 $1,450 8.25% 9.00% $175 $250

secondary $70 $100 10% 20% $900 $1,100 9.00% 10.00%

Economic UpdatesolId natIonal econoMIc gRowth the June Quarter 2012 aBs Gross domestic Product (GdP) data, showed in seasonally adjusted terms, GdP increased 0.6% during Q2 2012. although slower than the strong result of 1.4% in Q1 2012, through-the-year GdP growth was a solid 3.7%. deloitte access economics expect annual GdP growth to be 3.0% in 2012-13 and to rise to 3.4% in 2013-14 before easing to 3.3% in 2014-15.

uneMployMent Rate steady as total eMployMent Falls the unemployment rate remains steady at 5.3% (trend) as unemployment rose to 645,600. total employment decreased to 11,506,900.

consuMeR pRIces edge up the latest inflation data from the australian Bureau of statistics (aBs) shows that annual headline inflation rose 1.4% in the september quarter 2012, compared with a rise of 0.5% in the June quarter 2012. this led to rise of 2% in through the year inflation to the september quarter 2012, compared with a rise of 1.2% through the year to the June quarter 2012. inflation remains within the rBa’s target range of 2% to 3%.

InteRest Rates steadyenough evidence showing that the national economy is growing at around trend without excessive inflationary pressures convinced the rBa Board to keep the official cash rate at 3.25% in november. the Bank pointed out that further effects of actions already taken to ease monetary policy can be expected over time.

the austRalIan dollaRafter fluctuating around parity with the $us over the first half of 2012, the recent round of quantitative easing (Qe3) announced by the us Federal reserve has been accompanied by trade in the australian dollar at between $us1.03 and $us1.04 in recent weeks.

Ipswich Motor

way

Logan Motorway

Cunning

ham Moto

rway

Gate

way

Mot

orw

ay

daoR eipmyG

Brisbane CBD

Sumner

Zillmere

Nudgee

Carole ParkLarapinta

Acacia Ridge

Virginia

Banyo

Murarrie

Yatala

Brown Plains

Cannon Hill

Tingalpa

Fisherman Islands

Lytton

Hemmant

Northgate

Geebung

Hendra

Eagle Farm

Morningside

Heathwood

Bundambar

20km

10km

30km

Beenleigh

Ipswich

Darra

Rocklea

Northside

Southside

Outer North

Outer SouthWest

Outer South

Australia TradeCoast

BRIsBane IndustRIal MaRkets

collIeRs InteRnatIonal | p. 2

research & forecast report | second HALF 2012 | industriAL | brisbAne

Key Market Indicatorsstate gsp vs gdp•deloitte access economics expect annual

growth in Queensland’s GsP to be 5.6% in 2011-12 and 5.7% in 2012-13. spending on resource sector engineering projects will continue to drive much of this growth as the Queensland economic growth rate is forecast to remain stronger than the national average over coming years

BRIsBane IndustRIal MaRket developMent pIpelIne•in terms of the Brisbane industrial market

development pipeline, there is approximately 164,000m2 of new industrial warehouse or distribution centre stock (over 5,000m2) which is in the development pipeline and in the following stages: contract let; site preparation in progress; construction; or more than halfway through but not completed).

contaIneRIsed tRade•the number of twenty foot equivalents,

(teu’s) for imports and exports (net of transshipment and empty containers) in 2011-12, was 449,665 imported and 314,134 exported teu’s. in terms of monthly averages, both imports and exports are growing which supports demand for large warehouses and distribution centre floorspace in the Brisbane market.

austRalIan gdp and queensland gsp, annual change (%)

source: deloitte / access economics / Colliers international research

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2011-12 2012-13 2013-14 2014-15

(Ann

ual G

row

th, %

)

QLD GSP Australian GDP

Forecast

BRIsBane IndustRIal developMent pIpelIne

source: Cordells / Colliers international research

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Development Approval Contract Let Site Preparation in Progress Construction More Than Half Way ThroughBut Not Yet Completed

Floo

rspa

ce (m

2 )

poRt oF BRIsBane IMpoRts and expoRts

source: Port of Brisbane / Colliers international research

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

2007-08 2008-09 2009-10 2010-11 2011-12

(Num

ber o

f TEU

's)

Imports Exports



Rents hold•Following a very strong amount of leasing

activity during the second half of 2011, leasing in the north side suburbs of eagle Farm and Pinkenba and the south side suburbs of Morningside, Colmslie, Queensport, Murarrie, Hemmant, lytton and Fisherman islands has become steadier. the area remains as Brisbane’s key industrial area due to the combination of significant port, road and rail infrastructure which facilitates excellent access to local, national and global markets.

• demand over the period stemmed from a broad base of tenants including firms engaged in logistics, manufacturing and services. significant leases were signed by lighting manufacturer and distributor Gerrard lighting, steel manufacturer Onesteel which secured the largest lease during the half at 12,860m2 and logistics firms thales australia. toll energy also signed a lease at Hemmant for an office /warehouse with 3,400m2 floorspace.

• unlike previous periods where demand has been relatively widespread throughout the australia tradeCoast, significant leases were only entered into in eagle Farm, Hemmant and Pinkenba in the six months to september 2012.

• rental rates have remained unchanged since the second half of 2011 with Prime grade net rents ranging between $110/m2 - $120/m2 and secondary grade net rents between $80/m2 - $110/m2

sales ReFelect dIveRse natuRe oF deMand •interest in the australia tradeCoast has been

consistent into the second half while recent purchases reflect the diversity of business located in this transport infrastructure rich precinct. in the over $5 million category, a modern office warehouse leased mainly to the reject shop at 175 eagle Farm road, Pinkenba was purchased by the Flower Property Group for $12.55 million. listed property trust Charter Hall purchased a 48,100m2 site in Hemmant which is used as container park. the property features heavy duty hardstand and is leased to tyne Container services. Brisbane based syndicate sentinel invested in another Hemmant industrial property. sentinel no 5 Pty ltd purchased 46-58 Gosport street from Onesteel trading Pty ltd in a sale and leaseback transaction.

•Fidelis investments ltd purchased its first industrial property when it bought 37 eagleview Place in eagle Farm for $7.2 million. the property features 5,335 m2 of floorspace and accommodates the VideoPro Group on a ten year lease.

•the Flower Property Group’s purchase shows a capital value rate of $2,403/m2. it is notable that this above average rate reflects the property’s key attributes including its Pinkenba location, modern office warehouse construction with extensive hardstand and the presence of a long lease. Overall, Prime average Capital values were unchanged over the period, ranging between $1,200 and $1,600 as average Market reversionary Yields remained between 8.00-8.75%. australia tradeCoast remains a sought after area with some slight downward pressure on yields still possible over 2013.

Australia TradeCoast

Brisbane based property syndicator sentinel purchased 46-58 Gosport street, Hemmant



Brisbane Northside and Outer NorthleasIng voluMes down slIghtly•rents have held steady over the last six months

while the fall in the amount of available space within the northside Precinct (which includes areas within the suburbs of Hendra, northgate, Banyo, Virginia, Geebung and Zillmere) has continued to impact the market. Prime rents are expected to remain supported by the lack of speculative construction.

•leasing activity has eased slightly in the second half with three significant leasing transactions occurring throughout the area. distinctive tile imports (dti) signed a lease for 3,708 m2 at Zillmere. dti supplies vitrified tiles, glazed porcelain tiles ceramic tiles, mosaics and cleaning product throughout australasia. their new premises provide additional space for warehousing at the rear. Bernafon, a manufacturer of hearing devices which employs about 100 people signed an 8 year lease with two five year options for an office warehouse in nudgee. the move from their previous site in Milton was mainly driven by a need to be close to the Brisbane airport as their entire product is airfreighted. the other significant lease during the half was signed by scrap metal dealer express Metal recycling. For this business, the key site attributes are the presence of both hardstand and warehouse with separate office area and exclusive rights to two of the three entrance points to the facility.

•in the northside, Prime grade net rents range between $110 - $120/m2 pa and secondary grade net rents fall between $60 - $90/m2 pa. in the Outer north, (which includes Brendale, strathpine, lawnton, north lakes, narangba, deception Bay, Burpengary, Kippa ring and Clontarf), prime grade net rents are slightly lower than the more central northside Precinct while secondary grade net rents are between $75 - $95/m2 pa.

puRchaseRs Re-enteR the MaRket•Following a relatively quiet period in the first

half of 2012, during the second half there were there three transactions over the $5 million threshold. and in similar fashion to the australia tradeCoast the purchases have been made by a diverse group of businesses. lusch Properties bought a modern freestanding office warehouse at Geebung which accommodates paper merchant PaperlinX australia. an online retailer took ownership of a freestanding office warehouse featuring a generous office component under vacant possession. Meanwhile, a private investor purchased a 3,000 m2 building incorporating laboratory and office space. the premises were pre-committed to Weatherford australia Pty ltd which is part of the Weatherford international group of companies that provides products and services to the oil and natural gas sectors.

•Prime average Capital values continued to fall between $1,200 and $1,600 during the period. With limited new speculative stock expected to enter the market and demand firm, Prime grade yields should be supported at around current levels into the 2013.

land In deMand wIth no speculatIve pRoduct•as in other Brisbane metropolitan industrial

Precincts, companies are seeking freestanding quality buildings on the northside and outer north. there remains very little in terms of speculative development therefore design and construct represents the only real option.

Hearing device manufacturer Bernafon signed a lease at unit 4, 629 nudgee road, nudgee



Southside and Outer South leasIng pIcks up•leasing volumes rose in the southside and

Outer south industrial Precincts with 9 leases for properties with floorspace greater than 2,000m2 signed off. this follows on from a quieter period in the first half when only five leases were sealed.

•although demand and enquiry levels were healthy, average net face rents have remained steady. this is largely due to the breadth of demand for industrial floorspace which was driven by the accommodation needs of firms in the machinery/automotive services, manufacturing, logistics and wholesaling/retailoring sectors.

• in another period where little additional new supply has come online, this broad based demand is expected to keep pressure on rents for quality properties in the 5,000m2 – 25,000m2 category. the supply shortage is expected to be met primarily by design and construct development over the year ahead with 96,000m2 of product in various stages of construction in the southside and Outer south precincts.

• rents were steady over the period with southside Prime grade net rents ranging between $95 - $115/m2 pa and secondary grade net rents between $65 - $95/ m2 pa. Outer south Prime grade net rents range between $100 - $120/ m2 pa and secondary grade net rents easing to fall between $60 - $100/m2 pa.

InFRastRuctuRe dRIvIng gRowth•sales transaction volumes also picked up

from the H1 2012 with four significant sales. significant transactions included purchases by listed property group Charter Hall, the Benlee Property trust no 5, a private investor and removalist company Kent transport industries.

• Charter Hall purchased a Kingston property which was formerly owned by Watpac. upon completion of a second construction stage which is scheduled in March 2013, the property will feature buildings and awnings as well as 16,643m2 of hardstand, gravel hardstand of 33,865m2 and some asphalt hardstand. the property is leased to Coates hire.

•Benlee Property trust no 5’s purchase of a modern office warehouse in Heathwood follows on from its purchase in March of a purpose built modern facility at Pinkenba. their Heathwood property which is also located in a transport rich industrial hub is fully leased to two tenants including Carey’s freight lines and symbio australia.

•average Prime Capital Values remained between $1,300/m2-$1,500/m2 in the southside and Outer south precincts. similarly, average Market reversionary Yields have remained steady over the six months to september 2012 ranging between 7.75-8.5%.

• the southern corridor represents a strategic location particularly for logistics firms and businesses servicing the mining and resources sectors. this is reflected by some recent land transactions. all Purpose transport purchased a 4ha englobo parcel in Berrinba in august at the rate of $105/m2. in a purchase of serviced land, Mc Phee distribution services paid $220/m2 for a site in larapinta. like many logistics firms, McPhee is consolidating its operations. it has plans to construct a $15 million facility to be operational by March 2013.

Manufacturing firm star solutions signed a lease at 39 iris Place, acacia ridge



staBle leasIng MaRket •While a broad range of industrial firms

operate in this Precinct, its western location makes the area attractive to firms servicing the needs of the resources and mining industry.

•Yet, over the last six months, mining related leasing transactions were less prominent as major leasing deals were entered into by automotive firms, manufacturers as well as companies servicing the mining and resources sector.

•Brisbane tray Bodies, an automotive machinery firm specialises in high quality steel vehicle products including products which are compliant for the mining sector, signed a lease for a 4,275 m2 premises at Wacol. also at Wacol, Onesteel recycling signed off on a lease for a 7,661 m2 facility. Onesteel recycling is an international company which provides processed quality ferrous and nonferrous recycled metal to australian steel mills, the foundry industry, domestic copper, brass, lead and aluminium industries.

• although demand remained strong and some speculative product is being delivered to the local market, Prime grade net rents remained steady and ranged between $100 - $120/m2 pa and secondary grade net rents between $60 - $100/m2pa.

sales ModeRate •Following a recovery in sales in the first half

when five transactions over $5 million occurred, in the second half transactions eased to more sustainable volumes. notably, these sales achieved the three highest prices in the Brisbane region during the period.

•two of these were purchases by 360 Capital from Walker Corporation properties located at ebbw Vale. the third sale was Heathley ltd’s purchase of a property owned by the trinity Group located in richlands.

• although there was an increase in transaction activity, no compelling evidence of change to Prime average Capital values could be discerned so the range of values continued to fall between $1,300 and $1,500/m2 while average Market reversionary Yields fell between 8.00-8.75%.

developMent actIvIty •there is approximately 50,000m2 of new

stock in the south West development pipe that is ether under construction, let for construction or has site preparation works underway. Property groups australand and dexus are continuing to show confidence in the precinct with their investment and development in the area.

•australand is currently providing the only major speculative stock addition to the Outer south West with construction of a development of a 15,000m2 facility in Boundary road in richlands underway.

•late last year, dexus purchased two adjoining lots (lot 1 and 2) at 3676 ipswich road, Wacol. Construction of one building is nearly complete with nissan set to occupy approximately 7,000m2 while construction is also underway on the second building.

Outer South West Precinct

Brisbane tray Bodies committed to a lease at 39 Mcroyle street, Wacol



6.00%

6.50%

7.00%

7.50%

8.00%

8.50%

9.00%

9.50%

10.00%

10.50%

H1 2008 H2 2008 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 H2 2012

% A

vera

ge R

ever

sion

ary

Yiel

ds

Yatala Industrial Yields

Prime Grade - Yields Secondary Grade - Yields

Source: Colliers International Research

Yatala Enterprise Area sales•the Yatala enterprise area (Yea) includes

industrial areas within Ormeau, stapylton and Yatala. it has been long regarded as the key area to accommodate industrial floorspace demand from industrial firms geared towards servicing both the Brisbane and Gold Coast markets.

•there was only one transaction recorded over the $5 million threshold. ael Holdings purchased a 5,081m2 facility at 55 Blanck street, Ormeau for $6.75 million in July. in another transaction, not quite over $5 million, an undisclosed buyer purchased a modern 1,692m2 facility at 149 Old Pacific Highway, Oxenford for $4.7 million in June.

•Colliers international area specialists have noted an increase in inquiry by owner-occupiers for 2-4 hectare parcels which remain in limited supply.

•it is also notable that tenant enquiry has also been at healthy levels. this is consistent with the area’s reputation as an overflow region for industrial users who are finding it increasingly difficult to secure suitable space in the australia tradeCoast and south and Outer south West markets.

leasIng •although firms servicing the needs of the

mining and resources sectors dominated the taking up of space, overall leasing activity decreased significantly over the period, with less than 19,000m2 of industrial space leased compared with nearly 60,000m2 in the first half.

•numbers of leases were also down with two significant leases signed this half compared to nine in the first half.

•Pearls MiiHome, an indian based company specialising in demountable and relocatable housing, has leased 3,215m2 in Yatala. While saipem australia, a large energy services provider, has taken 3,075m2 at stapylton.

•Prime grade net rents remained steady over the period, ranging between $100 - @120/m2 pa, while secondary grade net rents ranged from $75 - $100/m2 pa.

32 Business street, Yatala became the premises of manufacturer Pearls MiiHome, a firm specialising in demountable housing.

yatala IndustRIal pRopeRty yIelds

source: Colliers international research



developMent update

address suburb total area (m²) statusestimated completion

date

commentsowner/comment

australia tradecoast

59 sugar Mill rd (lot 2 rP 119762) Pinkenba 8,127 under construction 2012 Construction of 4 new interconnected warehouses and ancillary

office.

Bishop drive Port of Brisbane 26,500 Contract let 2013Construction of depot for australian Container Freight services to include warehouse with free standing office and container hardstand.

north side and outer north

524 Bilsen rd (110 Zillmere rd lot 2 sP 198921 & lot 1 rP801643))

Geebung 9,875 under construction 2012 energex depot redevelopment including warehouse, workshop and office.

south side and outer south

98 Kerry rd (lot 24 rP 100451) archerfield 5,500 under construction 2013

Proposed demolition of one building, refurbishment of some existing buildings and construction of new warehouse with external storage area.

77 logistics Pl (lot 3) larapinta 15,330 site preparation in Progress 2013 Construction of industrial building with 14817sq m warehouse &

office

1123 Beaudesert rd (lot 1 rP 188127) acacia ridge 21,660 under construction 2012 Conversion of existing warehouse to provide warehouse,

workshop, administration and display area

495 Wembley rd (Part lot 1 rP 886148) Berrinba 25,000 under construction 2013 Construction of 2 storey industrial building with warehouse, office

and amenities.

3511 - 3513 (lot 1) Pacific Hwy rP213986 & rP220177 slacks Creek 5,513 Contract let 2013 Proposed new ikea warehouse next to existing ikea store.

198 Paradise rd Willawong 5,900 Contract let 2012Construction of warehouse with ground floor office and

mezzanine office

84-88 (lot 1) Magnesium dr

sP106313 Crestmead 7,115 under construction 2013

Construction of a warehouse for the minor processing and

storage of timber.

outer south west

105 & 121 Coulson & 100 tile sts (lots 47 & 48 rP79956 lot 34 rP80077)

Wacol 14,737 under construction 2012 staged construction of 3 separate buildings incluiding an industrial facilty for assembly of mining trucks.

163 Viking dr, 3676 ipswich rd (lot 1 sP 208830)

Wacol 13,629 under construction 2012Construction of 2 industrial buildings. Building 1 will be a nissan Warehouse with ancillary office. Building 2 to be a warehouse with ancillary office.

14-28 Flint st, 374 Boundary rd (lot 1 rP 223135)

richlands 15,016 under construction 2012 reconfiguration of 4 lots into 2 lots & construction of 3 warehouses with ancillary office in 2 stages.

New Supply Pipeline

source: Cordells / Colliers international research



leasIng actIvItyaddress suburb start date area (m2) net Face Rent ($/m2 pa) tenant


55 Brownlee street Pinkenba Jun-12 5,597 $107 Harris Communications

111 Brownlee street Pinkenba Jun-12 2,041 $200 Mastermyne

860 Kingsford smith drive eagle Farm May-12 2,957 Gerrard lighting

17 sugarmill road eagle Farm Jul-12 5,087 $157 thales australia

46-58 Gosport street Hemmant Jun-12 12,860 Onesteel

1 Wyuna street Hemmant aug-12 3,400 $127 (gross) toll energy

north side

485 Zillmere road Zillmere Jul-12 3,708 $45 distinctive tile imports

89-115 Frederick street northgate May-12 2,187 $61 (gross) express Metal recycling

4/629 nudgee road nudgee aug-12 2,900 $182 Bernafon australia

south side

22 ashover road acacia ridge Jun-12 3,052 $98 atom supply

39 iris Place acacia ridge Jul-12 3,526 $112 star scaffolds

ipswich road rocklea Jul-12 3,500 $75 autoparts

44 shettleston street rocklea Jul-12 2,000 $75 emerald refridgerated logistics

79 Bradman street acacia ridge aug-12 2,500 $75 access service

116 Grindle street rocklea sep-12 3,224 Waynes World

outer south

39 distribution street larapinta aug-12 3,453 $116 Personalised Freight Management

13-23 Budu Court Meadowbrook sep-12 4,562 $139 australian Portable Buildings

100 southlink street Parkinson sep-12 2,270 $120 actrol

outer south west

39 Mcroyle street Wacol Jul-12 4,275 $126 Brisbane tray Bodies

124 Viking road Wacol aug-12 7,661 $73 Onesteel recycling

yatala

63 Burnside road stapylton May-12 3,075 $93 saipem australia

32 Business street Yatala May-12 3,215 $118 Pearls MiiHome

Recent Market Activity




sales actIvIty

address suburb sale price $M

date of sale** gla m2

capital value $/m2

Reversionary yield* vendor purchaser


175 eagle Farm road Pinkenba $12,550,000 May-12 5,222 $2,403 8.73% Property solutions Flower Property Group

46-58 Gosport street Hemmant $16,000,000 Jun-12 12,860 $1,244 9.73% Onesteel trading Pty ltd sentinel no 5 Pty ltd

37 eagleview Place eagle Farm $7,200,000 sep-12 3,917 $1,838 Private Fidelis investments ltd

80 Canberra street Hemmant $13,250,000 Jul-12 45,000 $294 8.72%accumulus investment

GroupCharter Hall

north side and outer north

58 Brickyard road Geebung $9,400,000 May-12 9,452 $994 9.84% raCQ Operations Pty ltd lusch Properties Pty ltd

931 nudgee road Banyo $5,750,000 aug-12 6,229 $923 australand stationary distributors undisclosed

lots 2 and 3 lietchs road Brendale $7,249,700 May-12 3,000 $2,417 8.00% Private

south side and outer south

29-47 Mudgee street Kingston $20,850,000 sep-12 3,527 $350 7.90% Watpac Charter Hall

71 stradbroke street Heathwood $6,750,000 Jun-12 5,540 $1,218 9.85% 360 Capital Benlee Property trust

no.5

38 Westgate street Wacol $8,750,000 sep-12 13,790 $635 Private Kent transport industries

104 Bluestone Circuit seventeen Mile rocks $5,000,000 apr-12 2,645 $1,890 8.00% Private

outer south west

453-479 Freeman road richlands $24,500,000 May-12 13,142 $1,864 9.06% trinity Group Heathley ltd

22 Hawkins Crescent ebbw Vale $32,000,000 Jun-12 18,956 $1,688 8.48% Walker Corporation 360 Capital

1 ashburn road ebbw Vale $30,300,000 Jun-12 26,628 $1,138 8.74% Walker Corporation 360 Capital

55 Blanck street Ormeau $6,750,000 Jul-12 5,081 $1,328.48 steel Foundations ltd a.e.l. Holdings australia Pty ltd

Recent Market Activity

* Yields quoted are reversionary yields** sale date refers to date of exchangesource: Colliers international research



InFRastRuctuRe update

Infrastructure project location statusestimated completion

date

commentsowner/comment

Rail

rail extension richlands to springfield u/C 2013

the project includes two train stations – one near Woodcrest College and one near the Orion shopping Centre, a 9.5km dual track rail line from richlands to springfield, an auxiliary city-bound lane on the Centenary Highway and two crossings under the Centenary Highway from springfield station to the Orion shopping Centre.

Road

legacy way toowong to Kelvin Grove u/C 2014 Construction of twin, two-lane tunnels, approximately 4.6km in length which will run

between toowong and Kelvin Grove.

Port of Brisbane Motorway lytton u/C 2013a $385 million upgrade of the Port of Brisbane Motorway now known as Port Connect which will include a new interchange. Will eliminate the need for heavy vehicles to use lytton road.

port

Future Port expansion Fisherman islands u/C Ongoing Future Port expansion to provide an additional 230 hectares of port land and increased quay line.

Brisbane Infrastructure Update




Outlookthe key metrics remained steady over the second half and for 2012 as a whole. looking forward, a sustained improvement in the Brisbane industrial market remains as the most likely scenario for the Brisbane industrial market in 2013.

demand for prime investment grade industrial assets should continue to be supported by the expenditure in the mining and resource sectors. although sentiment in the mining and resources sector has been impacted by falling commodity prices, investment activity remains at high levels. the lower interest rate regime should also assist in stimulating demand for a range of consumer items which move through Queensland’s supply chains. in addition, growth in containerised trade through the Port of Brisbane will assist in underwriting demand for distribution and warehouse floorspace into 2013. these three factors should work together to provide some confidence for the Brisbane industrial market into 2013. the key risk to this outlook is the potential for a weak Queensland labour market to impact on the parts of the industrial market that are sensitive to residential services and consumption.

looking into 2013, there may be some potential for demand for industrial product to push yields on some high quality property slightly lower but yields are expected to remain at current levels in the band from 7.75-9.0%.

there is approximately 164,000m2 of new industrial construction in the development pipeline which is either let for construction, under construction, in site preparation stage or more than half way finished construction. However construction of new speculative product (above 5,000m2) has been almost non-existent with dexus and australand being the major property groups showing confidence in the Brisbane market over the past year or so. With overall demand conditions healthy and supply conditions tight, it is considered that rental pressures will gather for prime investment grade assets. in light of this, rental growth for prime investment grade assets is likely to rise over the course of 2013 with this growth likely to be in the order of 2.5-4.5%. Meanwhile, rental growth for secondary grade product is likely to be relatively flat and consistent with the markets recent performance.

While the mining and resources sector will continue to play an important role in taking up space in Brisbane’s industrial market in the coming few years, one notable feature of the second half was the diversified nature of tenants and purchasers. this is another positive sign for the Brisbane industrial market as such diversity should continue to create opportunity into 2013.

collIeRs InteRnatIonal

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ReseaRcheR

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Colliers international does not give any warranty in relation to the accuracy of the information contained in this report. if you intend to rely upon the information contained herein, you must take note that the information, figures and projections have been provided by various sources and have not been verified by us. We have no belief one way or the other in relation to the accuracy of such information, figures and projections.

Colliers international will not be liable for any loss or damage resulting from any statement, figure, calculation or any other information that you rely upon that is contained in the material. COPYriGHt - Colliers international 2012.

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brisbane industrial research forecast report second half 2012

Documents

half of2012

yatala secondary

brisbane market

industrial space

stock west secondary

atc land values secondary

year inflation

unemployment rate steady