COAST INDUSTRIAL RENTS UNDER PRESSURE: REPORT
HERRON Todd White’s final month in review for the year concerns the upward pressure on industrial rents due to a shortage of stock.
The valuation firm notes in its report that the market for industrial leasing has tightened, resulting in a noticeable lift in rental levels.
It gives 35 Alex Fisher Dr, Burleigh Heads, which hosts a 910sq m brick and masonry building, as an example. “It was built between the 1970s and early 1980s with below average clearance and overall is ageing in presentation,” the report reads.
“The rent achieved reflects $146 per square metre of lettable area gross (excluding GST). A similar property at 21 Activity Court, Molendinar was leased in January, 2017, for circa $138 per square metre per annum gross, indicating growth of up to 6 per cent in a relatively short period of time.”
The report says concrete-tilt panel buildings of a similar size as at 35 Alex Fisher Dr are being leased for in excess of $160sq m, whereas a year ago it was in the range of $140$155sq m. “Interestingly, price levels for investment product have not jumped as significantly as owner-occupier sales, meaning that investment returns have improved,” the report reads.
It concludes that the industrial market has gone from strength to strength in the past year, however, the future is unclear “particularly given concerns over the prediction of an upward interest rate movement”.