The industrial property market is going from strength to strength as capital values continue to rise across South East Queensland. Record low interest rates combined with the security associated with investing in tangible assets have resulted in an influx of investors looking to acquire industrial property. Most of these investors are chasing a passive annual income stream that represents a good return on their investment. This increased demand has created fierce competition between investors, compressing yields to record low levels and driving up the value of industrial assets.
The limited supply of investment opportunities has led to people seeking alternative options to achieve their investment objectives. These may involve more risk but also have the potential for a higher return. This includes purchasing vacant properties with the intention of securing a tenant as soon as possible, and purchasing land that can be developed. Industrial zoned land is now in short supply with some of Queensland’s largest upcoming industrial land subdivisions, including the Crestmead Logistics Estate and the Yatala Logistics Hub, being completely pre-committed months prior to receiving titles.
There are many promising indicators that suggest these market trends may continue including increased levels of interstate migration, the upcoming infrastructure in South East Queensland and the 2032 Olympic Games. However, there is also a large amount of uncertainty surrounding the impact of the COVID-19 Pandemic on the future of the economy and how this may impact the industrial market in South East Queensland. In early 2020, it was highly anticipated that the property market would crash with COVID-19 and lockdowns looming. What actually happened was quite the opposite. Right now, investment demand has driven industrial property values to an all time high. No one knows what the market will look like in 12 months.
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