BRISBANE INDUSTRIAL MARKET OVERVIEW API State of the Market Brisbane Industrial 22 nd of March 2018
QLD GROWTH
QLD KEY DRIVERS OF GROWTH Fueled by Tourism up 80% over next decade $43b infrastructure Investment over the next decade Net interstate Migration up 55%YOY 2017 18 3
JOBS GROWTH 4 Source: ABS
5 BLUE COLLAR WORKER GROWTH
QLD KEY DRIVERS OF GROWTH TEUs Volumes (Monthly) 6
INFRASTRUCTURE PROJECTS
CURRENT INFRASTRUCTURE PROJECTS Queensland Project Stage Cost Queens Wharf Under Construction $3 billion Brisbane Quarter Under Construction $1 billion Brisbane Live Development Subject to Funding and Approval $2 billion Brisbane Metro Subject to Funding and Approval $944 million Brisbane Airport Runway Under Construction $1.4 billion Brisbane Cruise Terminal Under Construction $100 million Cross River Rail Under Construction $5.4 billion Ipswich Motorway Upgrade Under Construction $400 million Logan Enhancement Under Construction $450 million Federal Budget Road Upgrade Under Construction $400 million Melbourne Brisbane Rail Funded in Planning $10 billion Toowoomba Crossing Under Construction $1.6 billion Gold Coast Light Rail Under Construction / Feas $1 billion 8
CURRENT INFRASTRUCTURE PROJECTS ATC & Brisbane Northside Brisbane Airport Parallel Runway $1.35 billion Completion in 2020 2,700 construction jobs Port Drive Upgrade ($110m) construction of the on/off-ramps for the new overpass over the Kite Street roundabout. 9
CURRENT INFRASTRUCTURE PROJECTS Brisbane South & South West Ipswich Motorway Upgrade Rocklea to Darra 4-6 lanes $400 million Completion 2020 Logan Enhancement $512 million Completion in mid 2019 1,300 construction jobs Federal Budget Road Upgrades - $500 million Widening the Pacific Motorway from Mudgeeraba to Varsity Lakes to six Lanes (jointly promised); Adding extra lanes to the Pacific Motorway where the Gateway Motorway enters at eight Mile Plains (jointly promised); Widening the Pacific Motorway from Varsity Lakes to Tugun 10 Widening the Mt Lindesay Highway between Browns Plains & Beaudesert
CURRENT INFRASTRUCTURE PROJECTS Other Major Projects Melbourne Brisbane Inland Rail Largest freight rail infrastructure project in Australia Preliminary works have begun Due for completion 2024/2025 Toowoomba Second Range Crossing Total Cost $1.6 billion A 41k long bypass route that will run from the Warrego Highway at Helidon Spa in the east to the Gore highway at Athol in the west via Charlton. Start 2015 and Complete late 2018 11
CURRENT INFRASTRUCTURE PROJECTS Other Major Projects Cross River Rail $5.4 billion 10.2km rail line between Bowen Hills & RNA Includes 5.9km twin tunnel under Brisbane River and CBD Completion in 2024 Brisbane Metro $944 million project Public transport system along a 21km route with 18 stations Metro 1 Eight Mile Plains to Roma St Metro 2 University of QLD to RBH 12
CURRENT INFRASTRUCTURE PROJECTS Other Major Projects Queens Wharf - $3b Integrated Resort 5 new hotels 3 residential towers Riverfront cinema 50 F&B Brisbane Quarter $1 billion project Brisbane s first integrated mixed use development Office hotel and residential Due 2019 13
CURRENT INFRASTRUCTURE PROJECTS Other Major Projects Brisbane Live Development $2 billion project 17,000 seat entertainment arena Restaurants, bars, outdoor theatre and cinema Brisbane Cruise Ship Terminal $100 million project Due 2019/2020 300 construction jobs per annum 14
CURRENT INFRASTRUCTURE PROJECTS Other Major Projects 15
SALES MARKET
Investment Activity To note: Investment sales greater than and equal to $5 million included 17 Source: RCA / Colliers Edge
TRANSACTION VOLUMES Brisbane Industrial Sale >$5M 18 Source: Colliers Edge
Offshore Investment The share of offshore buyers has increased over the past few years 19 Source: RCA / Colliers Research
TRANSACTION VOLUMES Domestic vs Offshore Source: Colliers Edge 20
TRANSACTION VOLUMES Major Sales 220 Orchard Road, Richlands 69 Tingira Street, Pinkenba Price: $157million Price: $48.5million Date: Dec-17 Date: Oct-17 Purchaser: Charter Hall Purchaser: Sentinel Property $/sqm: $1,923 Initial Yield: 5.19% Group $/sqm: $1,818 21 Initial Yield: 8.20%
TRANSACTION VOLUMES Major Sales 741 Nudgee Road, Hendra Price: Date: Purchaser: $28.5million Sep-17 Augusta Capital $/sqm: $1,875 Initial Yield: 7.03% 22
2017 Portfolio Sales BRADMAN DISTRIBUTION CENTE 338 BRADMAN ROAD, ACACIA RIDGE QLD Date October 2017 (Goodman Portfolio 3) Vendor Purchaser Lettable Area Goodman Blackstone 55,020m² Site Area 110,600m² Lease Term Income Various $5,574,003 p.a. net Tenant Salmat, MJ Logistics Sale Price $76,500,000 2.3 year WALE 7.29% initial yield 6.96% market yield $1,390/m² Location Bradman Distribution Centre is located within Brisbane s established industrial precinct of Acacia Ridge, approximately 16 kilometres south west of the Brisbane CBD. Major transport routes are easily accessible with direct access to Beaudesert Road and Ipswich Motorway located within close proximity.
2017 Portfolio Sales FOREST LAKE DISTRIBUTION CENTRE 44 STRADBROKE STREET, HEATHWOOD QLD (Goodman Portfolio 3) Date October 2017 Vendor Goodman Purchaser Blackstone Lettable Area 55,739m² Site Area 151,600m² Tenant Coles Lease Term 20 years Income $5,942,892 p.a. net Sale Price $82,000,000 5.2 year WALE 6.46% yield $1,471/m² Location Forest Lake Distribution Centre is located within the Logan Corridor Industrial Precinct, approximately 22 kilometres south west of the Brisbane CBD. The property forms part of the Heathwood Industrial Estate providing immediate access to the Logan Motorway via the Staplyton Street interchange.
2017 Portfolio Sales ACACIA RIDGE BUSINESS PARK 1502 BEAUDESERT ROAD, ACACIA RIDGE QLD (Goodman Portfolio 3) Date October 2017 Vendor Goodman Purchaser Blackstone Lettable Area 76,909m² Site Area 178,900m² Tenant Various Lease Term Various Income $6,036,632 p.a. net Tenant Greenfield Mowers Sale Price $73,500,000 3.6 year WALE 8.21% initial yield 7.35% market yield $956/m² Location Acacia Ridge Business Park is located within Brisbane s Southern Industrial Precinct, approximately 14 kilometres south of the Brisbane CBD. The property is within close proximity to the Acacia Ridge Intermodal and major transport routes including the Ipswich Motorway.
PORTFOLIO SALES Major Sales 11 Kellar Drive, Berrinba 196 Viking Drive, Wacol Price: $12.2 million Price: $14.9 million Date: Jan-18 Date: Jan-18 Purchaser: Cache Logistics Purchaser: Cache Logistics Trust Trust 26 $/sqm: $1,645 Initial Yield: 7.13% $/sqm: $2,610 Initial Yield: 6.52%
TRANSACTION VOLUMES Major Sales 1-7 Wayne Goss Drive, Berrinba Price: $30 million Date: Dec-17 Purchaser: Ascendas Land Area: 30,196 sqm NLA: 17,880 sqm 27 $/sqm: $1,678 19 and 20 Hashim Place, Berrinba Price: $22.1 million Date: Dec-17 Purchaser: Logos Land Area: 98,500 sqm $/sqm: $224 (land)
MARKET OVERVIEW National Land Values Note: Annual Growth Rate YoY as at December 2017 28
MARKET OVERVIEW Brisbane Land Values 29
MARKET OVERVIEW Prime Grade Capital Values National 30
MARKET OVERVIEW Prime Grade Capital Values Brisbane 31
MARKET OVERVIEW Prime Grade Capital Values Brisbane 32
Global Yield Comparison To note: yields reflect average prime industrial assets, as at June 2017 33 Source: Colliers International
MARKET OVERVIEW Prime Grade Average Yield East Coast 34
MARKET OVERVIEW Prime Grade Average Yields - Brisbane 35
MARKET OVERVIEW Average Yield Spread - Brisbane 36
MARKET OVERVIEW Secondary Grade Capital Values National 37
MARKET OVERVIEW Secondary Grade Capital Values Brisbane 38
MARKET OVERVIEW Secondary Grade Average Yield East Coast 39
MARKET OVERIVEW Secondary Grade Average Yield Brisbane 40
LEASING MARKET
MARKET OVERVIEW Prime Grade Net Face Rents - National Note: Annual Growth Rate YoY as at December 2017 Source: Colliers Research 42
MARKET OVERVIEW Prime Grade Net Face Rents - Brisbane 43
MARKET OVERVIEW Brisbane Incentives by Asset Class 44
MARKET OVERVIEW Prime Grade Incentives Brisbane 45
MARKET OVERVIEW Secondary Grade Net Face Rents - National Note: Annual Growth Rate YoY as at September 2017 Source: Colliers Research 46
MARKET OVERVIEW Secondary Grade Net Face Rents 47
MARKET OVERVIEW Secondary Grade Net Face Rents - Brisbane 48
MARKET OVERVIEW Brisbane Industrial Supply Pipeline 49