Colliers International release Industrial Research and Forecast Report for H2
Industrial land values in Australia are being driven by major infrastructure projects and rapid population growth, particularly on the East Coast, according to Colliers International’s latest Research and Forecast Report (RFR).
Colliers report states that at the second half of 2019, Sydney’s industrial capital values ($3,258 per sqm) and land values ($1,261 per sqm) are the highest in the country, representing an 8% and 4% increase respectively, on the previous six months of the year.
Melbourne has the second highest capital value for the same time period ($1,975 per sqm) followed closely by Brisbane, ($1,874 per sqm). Over on Australia’s west coast, Perth recorded the country’s second highest land value ($438 per sqm), followed by Melbourne ($393 per sqm).
According to Colliers Internationals’ report, these prices are being determined by major transport infrastructure projects which play a critical role in shaping the dynamics of how a country uses its labour force and capital.
“The Australian transport infrastructure network has entered an era of transformation and renewal, with an estimated $133 billion of committed projects under construction, and over 65 per cent of this investment scheduled for completion in the next three to five years,” said Malcom Tyson, Managing Director, Industrial at Colliers International.
“There can be no doubt that the current transport infrastructure investment is set to transform the outlook of the industrial market for operators, developers and investors alike.”
Several infrastructure projects currently under construction on Australia’s East Coast are expected to have a significant impact on the way the county’s industrial market operates. These include; the $16.8 billion Westconnex project in Sydney; the $6.7 billion West Gate tunnel project in Melbourne and the $10 billion Inland Rail project which will expand and connect supply chains across Melbourne and Brisbane international and domestic markets.
The Colliers International Industrial RFR also highlights that the value of industrial land is being driven by rapid population growth. Sydney has reported an increase in industrial land values in the range of 85% – 215% for the past five years; Melbourne’s land values have increased between 25%-105% and Brisbane’s between 25%-50%.
“Rapid population growth and high population density in the East Coast underpin the increase in land values throughout the largest capital cities, as land availability for industrial development becomes limited and its use is restricted to other purposes, particularly in proximity to the CBD,” said Simon Andreatta, Head of Industrial Valuations at Colliers International.
Karina Salas, Research Manager at Colliers International said, “As more than half of the Australian population remains heavily concentrated in Sydney, Melbourne and Brisbane, industrial land values in these capital cities will continue to trend upwards, with the transition from bricks and mortar retail to ecommerce retail becoming another key driver of industrial activity in these regions.
Read the full report here.