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Confidence boost in Brisbane market with offshore demand

Colliers International has made three significant appointments to its Real Estate Management (REM) team in Queensland as a result of a boost in market confidence and rising offshore demand for office assets.  

“We are pleased to announce the appointment of Tim Matthews, State Product Director, Daniel Shafferman, National Director and Steven Schneider, Director based in our Brisbane office with a focus on growing the REM service offering in Queensland and nationally,” said Denis Coupland, Managing Director of Real Estate Management at Colliers International.

“Tim has an outstanding background in the management of portfolios and major assets and was previously the Commercial Manager at The GPT Group, overseeing their Queensland portfolio. Tim brings a wealth of experience working with offshore investors and is a strategic recruit bringing an asset management skill set to the team and importantly our client’s assets. He will be responsible for leading the Queensland team and delivering the best in class service in that market.

“In the role of National Director, Daniel Shafferman will provide a holistic industrial property management service to our clients. As a trusted advisor, he will run the national team to ensure we help our clients develop and implement strategic plans to enhance the value of their investment,” said Mr Coupland.

“Steven Schneider, Director, will look after the QLD and NSW retail portfolio. This comes with recent success in the retail sector with Colliers International winning a multi-site agreement with Mulpha to manage their two iconic assets being Gasworks and Sanctuary Cove. Retail management remains a growth sector for Colliers International Real Estate Management and the addition of Steven Schneider is an enormous strength for the Queensland team,” said Mr Coupland.

The commercial market in Brisbane has continued to generate interest from both domestic and offshore parties given the arbitrage between yields in Brisbane and the Australian gateway cities of Sydney and Melbourne.

QLD Colliers appointments 08.06

This year has already seen Singaporean based AEP Investment Management’s acquisition of 41 George Street for $159.8 million and LaSalle Investment Management Asian Property Fund’s acquisition of 28 MacGregor Street, Upper Mount Gravatt for $57.1 million.

Both deals were brokered by Colliers International and were underpinned by leases to QLD State Government (5.35 year WALE) and Australian Taxation Office (5 year WALE) respectively. We anticipate that this trend will continue into 2016, with Brisbane’s strong relative yields proving attractive against a backdrop of lower global growth.

Brisbane has also experienced the biggest demand since mid-last year with tenants seeking 43,754sqm of office space in Q1 this year, according to Colliers International Office Demand Index report. Tenants looking for 3,000sqm or more space saw the largest increase which is positive considering the upcoming supply pipeline.  

The volume of leasing transactions and inquiries is improving and we are in a better position to this time last year with recent sizeable transactions providing much needed positive net absorption. Some of these include Qld State Government moving into AM60 and Tatts Group relocating to 180Brisbane.

Mr Matthews said landlords operating in the commercial sector need to have a firm understanding of the current market conditions and the competitive environment in which they are operating. 

“Active tenants continue to focus on ‘flight to quality’ when considering leasing options. With the new supply continuing to be rolled out and the sub-lease market intensifying, landlords exposed to vacancy need to ensure they are strategically investing back in their assets to create attractive work environments.   

“The future outlook continues to support strong offshore demand for quality office stock in the Brisbane market. This means there are great opportunities for landlords to review their disposal strategies for non-core assets or those that have reached the end of the asset life cycle to take advantage of the tightening sale yields being achieved,” Mr Matthews said.

According to Mr Shafferman, the top three concerns for the landlords in the industrial sector currently are tenant retention, residential encroachment and risk mitigation.

“There is a lot of competition in the market to attract major national tenants with strong covenants, where large incentives and D&C options are being offered.

“To retain the tenant, our team of active asset managers are on the ground working closely with the site managers identifying their business needs and growth potential. We investigate opportunities to reset leases early to suit both tenants and landlords.

“Residential encroachment is another concern to landlords located in the areas that are being rezoned for residential or commercial developments.

“We manage this transition and find flexible and innovative solutions to suit all parties. A great example of this is the Northshore Hamilton, where the 304 hectare precinct will transform from an industrial area into a vibrant riverside precinct over the next 20 years,” said Mr Shafferman.

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