LOGISTICS SURGE FUELS THE FLIGHT TO QUALITY
INVESTORS have logistics and cold storage facilities firmly in sight as the flight to quality gains pace in the Gold Coast commercial property market.
Demand for new space has spurred Logos, the developer of the Gold Coast Logistics Hub in Arundel, to release plans for the spec build of a 14,000sq m facility at the Arundel estate.
CBRE Gold Coast industrial and logistics director David Corke said not only are logistics assets in strong demand from investors but they are also drawing in ancillary businesses that want to be in proximity.
“The new Toll facility at the logistics hub has proven to be a substantial gain for them in the marketplace,” Mr Corke said.
“Wrapping around the logistics piece are other companies involved with online sales because they want to be close to these guys as well.
“We are in discussions with one very substantial and a second-tier online sales company that have been issued documentation for a lease. The hub will turn into a true logistics hub with ancillary businesses floating around the outside.”
Mr Corke said the surge in demand has led to land prices within the estate increasing from $500 to $550 a square metre.
He said Burleigh and the other industrial areas of Arundel have also seen price increases to $3000 and $2700 a square metre for units.
However, Mr Corke said when businesses need to expand to larger facilities, there is little to cater for the demand. He said besides the logistics hub there is also the City Link Industrial Estate in Carrara owned by Tim Gordon’s Gordon Corp.
“The building Logos is putting together is trying to absorb a lot of that demand,” he said.
“They are basically sausages and they will cut them up where they need to for companies needing space between 2000 and 8000 square metres.”
CBRE Gold Coast managing director Mark Witheriff said industrial and logistics is the most active part of the commercial market globally.
“If you look at the US, Asia, Europe and Australia each, these sectors are doing well because with lockdown comes online shopping and with that comes delivery and there has to be a delivery chain all the way through,” he said.
“Investors are looking for bluechip, long-term stable tenants.
“Security is the biggest thing for them. There is so much liquidity in the market … and the flight to quality sits around this space.”
A recent example of a sale in this sector is 1 Lahrs Rd in Ormeau tenanted by the Markwell Foods cold storage facility and sold to Centuria Industrial REIT for $43m last month.