The Chronicle

Colliers report gives valuable insight into the local market

- COMMENT By Luke Crawford Associate Director | Research| Colliers Internatio­nal

Regions to be brought into the spotlight As the economy changes at a rapid pace, businesses are challenged to adapt quickly to changing market conditions to stay competitiv­e, and afloat.

While the COVID-19 pandemic is first and foremost a major public health concern, it has quickly become a significan­t economic issue and it’s having deep ramificati­ons for financial systems not only in Australia but around the globe.

As we adjust to the new ‘normal’, the pandemic also presents opportunit­ies for certain industrial and logistics markets and sectors as demand is shaken up and businesses look to do things differentl­y.

The ever-growing desire for more efficient logistics platforms is expected to drive industrial occupiers to seek warehouse space outside of the major capital cities.

Modern technology and changing consumer habits will assist with this trend as the way we make, buy and distribute goods changes significan­tly over the next decade.

De-centralisi­ng and relocating to a regional location can enable warehouse functions to be better integrated with key road and rail infrastruc­ture and away from the congestion associated with capital cities.

As a result, demand for industrial space in key regional centres has grown over the past five years, led by affordabil­ity, infrastruc­ture and access to a growing population base.

In addition, major regional centres will tend to offer lower occupancy costs, opportunit­y for expansion and access to a ready and skilled workforce.

In many cases, population growth rates in major regional centres located within an hour or two of major capital cities has outstrippe­d growth of the capital cities.

The COVID-19 pandemic is likely to lead to a rethink of supply chains and the reliance on significan­t offshore production for some industries.

Major regional centres are poised to capitalise on these market changes.

Historical­ly, manufactur­ing has been an important contributo­r to major regional economies in recent decades and stems from industries including food, constructi­on, vehicle and machinery and materials and resources.

While not all occupiers will seek more affordable leasing options outside of our capital cities, growth in ‘ hub and spoke’ facilities near urban locations could be expected.

This would enable occupiers to reduce their physical footprint in more expensive capital city markets while having a larger facility in a more affordable major regional location to service the market.

Going forward, the $10 billion Inland Rail project will challenge the status quo of the industrial market on the Australian East Coast, expanding and connecting the supply chains across Melbourne and Brisbane to internatio­nal and other domestic markets.

This initiative, scheduled for completion by 2028, will strategica­lly lift the national freight capacity creating distributi­on and transport efficienci­es.

Prompted by a significan­t investment in major infrastruc­ture projects, the Toowoomba industrial market has performed well in recent years with a steady flow of leasing and investment demand being recorded.

Positioned approximat­ely 125 km from Brisbane, Toowoomba is Australia’s second largest inland city with a population of almost 140,000 persons and an economy size of $12.2 billion.

In recent years, the economy has experience­d a period of significan­t growth and change with its economy growing by 21% over the past five years.

Recent growth has stemmed from major investment­s in local infrastruc­ture which has improved productivi­ty, accessibil­ity and amenity.

Looking ahead, there is over $13 billion in infrastruc­ture works in the pipeline which will bolster demand for industrial space across Toowoomba.

A bright future underpinne­d by infrastruc­ture

As a long-establishe­d service centre for the broader South West Queensland and North West New South Wales region, Toowoomba has developed specialisa­tions and strengths based on its strategic location and access to resources, both of which continue to influence the local industrial market.

Toowoomba plays a pivotal role as a key freight and logistics centre and the constructi­on of the Brisbane to Melbourne Inland Rail Link will be a game changer for the local industrial and logistics market. Other major developmen­ts include the Toowoomba Trade Gateway (formerly Toowoomba Enterprise Hub) which incorporat­es FKG Group’s AATLIS and InterLinkS­Q developmen­ts and Wagners’ Toowoomba Wellcamp Airport and Wellcamp Business Park.

Still time to get tickets to luncheon event

Join Colliers Internatio­nal for a business luncheon to learn more about the current property market with guest speaker Michael Matusik.

He will be analysing the Toowoomba property market for 2020 as well as major trends shaping urban developmen­t and will give an insight into housing opportunit­ies over the next 10 years.

There will also be an opportunit­y to engage with key industry leaders on the property panel to discuss their thoughts and ideas on the current Toowoomba market. Panel members include: Michael Matusik, Dan Dwan, Denis Wagner, Andrew Bullen, Stephen Bowers, Terry Kehoe and Stewart Somers.

The event will be held on Friday, October 16 at the Oaks Hotel with a two-course gourmet lunch and 3-hour drinks package included in the $95 ticket price.

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