- property analysts are convinced the demand for industrial development will boom in 2008 in Sydney and Brisbane. Most demand comes from large supermarkets and transport companies. Analysts beleive this increase is due to a rise in consumer confidence levels. The industry-related sharemarket has inclined also, as unemployment levels are at an all time low! Great news for the industry I think!!
Article follows:
The soaring demand for industrial property space will peak in Sydney and Brisbane next year, then start to tumble in 2009, analysts say.
In a report, UBS property analysts attributed strong industrial tenant demand to Australia's economic growth, low unemployment and upbeat business sentiment.
"In 2008, Sydney and Brisbane are expected to peak, and then in 2009 begin a downswing," UBS said.
UBS said industrial markets in Sydney, Melbourne and Brisbane were currently at the top of the property cycle, with demand coming from some of the largest occupiers of industrial property space, such as supermarkets and transport companies.
The predictions on the downturn come amid an increase in the amount of industrial property up for sale, with rents rocketing 25.6 per cent in Perth in the year to March 2007, and 16.1 per cent in Brisbane.
Overall, in the year to March 2007, Australian prime industrial rents grew by 13.1 per cent to reach an average of $98 per square metre.
"Retail sales and consumer confidence data have returned to the levels last seen in 2003 amid the housing property boom.
"Further, jobs growth is healthy, while the unemployment rate is at a record low."
Investors were moving aggressively to establish a foothold around Sydney's M7, the TradeCoast in Brisbane and the Eastlink and Craigieburn Freeway in Melbourne.
Analysts at the investment bank added the situation was triggering strong performances on the share market with listed industrial property trusts.
Among the stand out listed trusts were Macquarie Goodman, ING Industrial Fund, Mirvac Industrial and those run by Stockland and GPT group.
"Macquarie Goodman stocks have underperformed in the broader market, but the near term earnings look much improved," the company said.
This was attributed to the announcement in April by property investor Macquarie Goodman that it planned to buy a UK-based Rosemound Developments Ltd for $840 million to bolster its planned UK logistics fund.
Sales of industrial property in Australia rose 94 per cent last year, totalling $3.7 billion.
This included the $180 million sale of Woolworths' Brisbane distribution centres to the Australian Prime Property fund in June.
The increase followed continued spending on infrastructure projects, linked to demand for new hubs, future population and business growth.
Sales of industrial property, so far reaching $254.4 million, would not reach the levels of last year, UBS said.
However, the sales would rise at a faster rate in the second half of this year.
There was also 1.7 million square metres worth of industrial space either under construction or approved for completion this year, most of which was in Victoria and Queensland.
"This equates to 1.7 per cent of current stock coming through," UBS said.
"Landlords continue to see record high occupancy across the Australian industrial market given strength in demand."
Article follows:
The soaring demand for industrial property space will peak in Sydney and Brisbane next year, then start to tumble in 2009, analysts say.
In a report, UBS property analysts attributed strong industrial tenant demand to Australia's economic growth, low unemployment and upbeat business sentiment.
"In 2008, Sydney and Brisbane are expected to peak, and then in 2009 begin a downswing," UBS said.
UBS said industrial markets in Sydney, Melbourne and Brisbane were currently at the top of the property cycle, with demand coming from some of the largest occupiers of industrial property space, such as supermarkets and transport companies.
The predictions on the downturn come amid an increase in the amount of industrial property up for sale, with rents rocketing 25.6 per cent in Perth in the year to March 2007, and 16.1 per cent in Brisbane.
Overall, in the year to March 2007, Australian prime industrial rents grew by 13.1 per cent to reach an average of $98 per square metre.
"Retail sales and consumer confidence data have returned to the levels last seen in 2003 amid the housing property boom.
"Further, jobs growth is healthy, while the unemployment rate is at a record low."
Investors were moving aggressively to establish a foothold around Sydney's M7, the TradeCoast in Brisbane and the Eastlink and Craigieburn Freeway in Melbourne.
Analysts at the investment bank added the situation was triggering strong performances on the share market with listed industrial property trusts.
Among the stand out listed trusts were Macquarie Goodman, ING Industrial Fund, Mirvac Industrial and those run by Stockland and GPT group.
"Macquarie Goodman stocks have underperformed in the broader market, but the near term earnings look much improved," the company said.
This was attributed to the announcement in April by property investor Macquarie Goodman that it planned to buy a UK-based Rosemound Developments Ltd for $840 million to bolster its planned UK logistics fund.
Sales of industrial property in Australia rose 94 per cent last year, totalling $3.7 billion.
This included the $180 million sale of Woolworths' Brisbane distribution centres to the Australian Prime Property fund in June.
The increase followed continued spending on infrastructure projects, linked to demand for new hubs, future population and business growth.
Sales of industrial property, so far reaching $254.4 million, would not reach the levels of last year, UBS said.
However, the sales would rise at a faster rate in the second half of this year.
There was also 1.7 million square metres worth of industrial space either under construction or approved for completion this year, most of which was in Victoria and Queensland.
"This equates to 1.7 per cent of current stock coming through," UBS said.
"Landlords continue to see record high occupancy across the Australian industrial market given strength in demand."
1 comment:
If Kevin Rudd gets in, in Australia I can see his effect causing property to go down by 2009.
Otherwise it is clear sailing ahead.
Rents in Brisbane have definitely had the biggest increase in a long time.
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