Inland rail: what's the impact?

Australia's newest rail network: QLD to VIC.

Written by Liam Morris, Tenant Advisor, Brisbane

The inland rail project has caught the attention of many industries after the Australian Rail Track Corporation received an $8.4 billion equity injection for the rail link in this year's federal budget. The Inland Rail Network will support freight and logistical movements between Brisbane, Melbourne, and Western QLD, NSW, and VIC, whilst providing access and connectivity to the national network to Perth.

With the exception of the Hunter Valley coal network, current rail infrastructure on Australia’s eastern seaboard only supports low capacity trains, with as little as 15 tonne axle load capacity in some places. The Inland Rail Network will enable the use of double-stacked, 1,800m long trains with a 21-tonne axle load travelling at a maximum speed of 115km/h. It is estimated each train could carry the freight volume equivalent to 110 B-doubles.

The Department of Infrastructure and Regional Development states that the Inland Rail project will utilise 1,200km of existing rail corridor, and will require the construction of around 500km of new track.

The terminus points of the Inland Rail network are Tottenham in Melbourne and Acacia Ridge in Brisbane. Rail haulage giant, Pacific National, is looking to build its first intermodal terminal just outside of Parkes, in central New South Wales, which would form part of the National Logistics Hub on the western edge of the town. Although Parkes is around 400 kilometres inland, more than 80 per cent of Australia's population can be reached by road in less than 12 hours from the proposed National Logistics Hub.

Bromelton in Queensland is also set to host an intermodal terminal – Scenic Rim Regional Council Mayor Greg Christensen said, “the Australian Rail Track Corporation, which will deliver the rail project, has bought large tracts of land within the Bromelton precinct, reflecting the strategic role the area will play in the future of freight and logistics”. 

What does the new inland rail network mean for occupiers?

The inland rail network is predicted to primarily benefit the agricultural sector as the rail line will travel through the richest farming regions of QLD, NSW and Victoria. Freight and transport is one of the biggest costs for regional occupiers producing primary resources (i.e. cotton, grain, meat, wheat and canola) and seasonal products from VIC and QLD freight. In addition, we foresee mining organisations utilising the rail network to transport resources, for example coal, between states.

The inland rail network will take some traffic off the road, typically vehicles carrying resources from rural regions, reducing congestion from QLD to VIC and potentially reducing accidents along these routes. In addition, the inland rail network (in comparison to trucks) will provide various environmental benefits including a reduction in carbon emissions. More importantly, the inland rail network will offer full interoperability with the interstate standard gauge network allowing trains to seamlessly travel from Brisbane to Perth via Parkes.

However, the inland rail network is unlikely to significantly impact occupiers outside of the agriculture and mining regions.

Impact to property markets

The inland rail network is unlikely to affect the property markets generally in Brisbane or Melbourne, as the likely outcome is logistics and freight operators utilising the network will still require warehousing and staging facilities in the respective capitals to distribute stock into the business districts and port terminals.

However it is likely that Acacia Ridge and Tottenham properties with existing rail spurs will receive greater demand moving forward, as these sites will provide operators utilising the network with immediate access directly from their property without requiring Council approval and construction of retrofitted spurs.

It's also likely areas such as Parkes and Bromelton, which will host intermodal terminals, will receive substantial growth in their respective industrial property markets as development of operators’ facilities grow, and the associated service industries require proximity to their clients. In addition, to large intermodal terminals, farming communities and regional towns are likely to see general economic benefits including employment opportunities.

To learn more about the inland rail network, read Colliers International’s Research 'The Melbourne – Brisbane Inland Rail’  written by Helen Swanson. To speak with an occupier expert contact Liam Morris.

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