BRISBANE INDUSTRIAL MARKET. Anthony White Director Industrial Colliers International

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1 BRISBANE INDUSTRIAL MARKET Anthony White Director Industrial Colliers International

2 BRISBANE INDUSTRIAL MARKET TRENDS Strong appetite for both primary and secondary grade investment stock as capital availability increases. Shortage of investment grade opportunities are beginning to see buyers push further up the risk curve to fill mandates. Prime yields not yet fully tested in the current market, suggest yields range between % Big shift in the Brisbane market is the emergence of institutions looking to create their own investment grade stock via new developments Leasing market remains relatively subdued, with most deals being struck as a result of efficiency drives rather than expansion. Land sales represent a two speed market. Owner-occupiers remain relatively subdued, running in alignment with the overall leasing market. Englobo sales are buoyant, primarily driven by institutional grade investors and developers seeking cheaper land for large scale developments. 2

3 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 BRISBANE INDUSTRIAL PRIME GRADE YIELDS 10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Spread Prime yield 10 yr govt bond Source: Colliers Edge 3

4 BRISBANE INDUSTRIAL PRIME INDUSTRIAL MARKET INDICATORS Region Average Net Face Rents ($/m² pa) Average Yield Average Land Values ($/m²) H H H H H H Australia TradeCoast $ % $275 North $ % $238 South $ % $225 South West $ % $225 Yatala $ % $200 Note: Figures represent market averages as at end of Q

5 $ per square metre BRISBANE INDUSTRIAL PRIME GRADE AVERAGE NET FACE RENTS $120 $118 $115 $115 $115 $110 $110 $109 $107 $105 $105 $105 $103 $103 $103 $103 $100 $95 ATC North South South West Yatala Average Sep-13 Mar-14 Sep-14 Source: Colliers Edge 5

6 BRISBANE INDUSTRIAL COMPOSITION OF LEASING ACTIVITY 23.6% 40.6% 4.7% 2.7% 28.4% Transport/Logistics Machinery/Auto Manufacturing Services/Other Wholesale/Retail Source: Colliers International 6

7 BRISBANE INDUSTRIAL DRIVE FOR EFFICIENCY With relatively subdued economic growth forecasts, we expect major warehousing users to continue to look for efficiencies in their warehouse operations. Most users are seeking highly efficient operational buildings, usually with the following key attributes: Minimum 9-10 metres of internal clearance heights Full fire sprinkling Generous hardstand and container set down areas Minimum internal columns and ability to install efficient racking systems Locations to suit transport studies typically Port of Brisbane to Ipswich for line haul businesses Investors have caught this trend and will take on leasing risk for buildings with these attributes. Similarly, the spec development market is back with several major offerings scheduled for completion this year. 7

8 BRISBANE Investment Transactions INDUSTRIAL New South Wales RECENT SALES 285 Lavarack Avenue, Pinkenba Gosport Street, Hemmant Vendor: OneSteel Purchaser: TDS Pty Ltd Sale Price: $14,500,000 Capital Value: $1,084/m² Yield: 8.96% Building Area: 13,371m² Site Area: 29,362m² WALE: 1 year Date: April 2014 (U/C) Vendor: Arrium Purchaser: Sentinel Sale Price: $16,000,000 Capital Value: $1,244/m² Yield: 9.73% Building Area: 12,860m² Site Area: 47,951m² WALE: 5 years Date: June Mica Street, Carole Park 9 Anton Road, Hemmant Vendor: Green s Biscuits Pty Ltd Purchaser: 360 Capital Group Sale Price: $23,875,000 Capital Value: $1,333/m² Yield: 8.00% Building Area: 17,916m² Site Area: 22,730m² WALE: 15 years Date: September 2014 Vendor: BWP Trust Purchaser: Australian Prime Property Fund Sale Price: $21,275,000 Capital Value: $1,163/m² Yield: 8.16% Building Area: 18,289m² WALE: 0 years Date: July

9 BRISBANE Investment Transactions INDUSTRIAL New South Wales RECENT SALES 7-9 French Avenue, Brendale 69 Rivergate Place, Murarrie Vendor: Paper Property Pty Ltd Purchaser: AMP Capital Sale Price: $18,650,000 Capital Value: $1,518m² Yield: 7.81% Building Area: 12,282m² Site Area: 19,100m² WALE: 7.15 years Date: November 2014 Vendor: Trinity Investment Management Purchaser: 360 Capital Group Sale Price: $27,000,000 Capital Value: $2,336/m² Yield: 7.92% Building Area: 11,558m² Site Area: 15,755m² WALE: 9 years Date: November Zillmere Road, Boondall Unit 10, 368 Earnshaw Road, Banyo Vendor: Pick Corporation Pty Ltd & W&JB Investments Pty Ltd Purchaser: 360 Capital Group Sale Price: $25,000,000 Capital Value: $1,601/m² Yield: 8.76% Building Area: 15,619m² Site Area: 31,900m² WALE: 9 years Date: December 2014 Vendor: Australand Purchaser: Boots Pastoral Pty Ltd Sale Price: $1,390,000 Capital Value: $2,313/m² Yield: 8.21% Building Area: 601m² WALE: 3 years Date: March 2015 (U/C) 9

10 THANK YOU QUESTIONS? Colliers International Level 30, 111 Eagle Street Brisbane QLD The opinions, estimates and information given herein or otherwise in relation hereto are made by Colliers International and affiliated companies in their best judgement, in good faith and as far as possible based on data or sources which are believed to be reliable. The material contained herein is not intended to substitute for obtaining individual advice from Colliers International or another advisor able to provide the services of a qualified professional person. Colliers International, its officers, employees and agents expressly disclaim any liability and responsibility to any person whether a reader of this publication or not in respect of anything and of the consequences of anything done or omitted to be done by any such person in reliance whether wholly or partially upon the whole or any part of the contents of this publication. COPYRIGHT Colliers International 2015 all rights reserved. No part of this work may be reproduced or copied in any form or by any means (graphic, electronic or mechanical, including photocopying, recording, recording taping, or information retrieval systems) without the written permission of Colliers International.