ISSUE 38 | AUtUmn 2012 King’s Counsel · 2017. 10. 12. · Counsel King’s ISSUE 38 | AUtUmn 2012 • Brisbane’s industrial market prospects are growing despite the unevenness

CounselKing’sISSUE 38 | AUtUmn 2012

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•Brisbane’sindustrialmarketprospectsaregrowingdespitetheunevennessofbusinessconfidence.Page4

•IndustrialsalesandleasingtrendsinandaboutBrisbane’snorthside,southsideandcityfringe.Page6

•Recentsalesandleasingtransactions:top10.Page26

•StateGovernmentintroducedInfrastructureFeeshamstringsnewindustrialprojects.Page32

A selection of property

opportunities for investors, owner/

occupiers, developers and tenants

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King & Co Property Consultants’ TeamKing’s Counsel portfolio sales/leasing campaigns, now in their 19th year, are designed for an increasingly sophisticated marketplace; one where clients demand, and expect to receive, the very best exposure for their properties. Employing a combination of marketing booklets, signage and print advertising, the King’s Counsel campaigns present prospective purchasers/lessees with a selection of Brisbane’s best industrial/commercial properties in a manner that ensures consideration and facilitates informed buying/leasing decisions.

For further details or to arrange an inspection of any property, contact the sales/leasing person mentioned in the relevant advertisement. Needless to say, our dedicated and experienced sales and leasing teams look forward to giving you any assistance you require. All prices quoted exclude GSt.

Public Auctions: See ads for dates.

Expressions of Interest and tenders close at King & Co Property Consultants Office, 99 Annerley Road, Woolloongabba Q 4102. Please check specific property details for correct time and date.

Private treaty Sales: A number of properties are listed for sale by Private Treaty. Please contact the agent handling the sale for further details.

Leases: Contact the leasing specialist nominated for the property.

King & Co is a member of REIQ, PCAQ & BDA

How experienced, attentive agents, an up to date database and a customised computer system help lease or sell your property.Established in 1988, King & Co is SE Queensland’s premier boutique agency, specialising in the leasing, selling and managing of industrial property. At the heart of our success is an experienced staff of 29 including 7 leasing consultants, 8 salesmen, 4 property managers, 1 cadet and 9 support personnel. Many have been with the company for at least 15 years and all are encouraged to constantly upgrade their expertise. To enhance client service, we also employ an in house PR professional and telemarketer King & Co has long been at the cutting edge of computerisation. This is best reflected in our customised Informix database program that rapidly marries prospective tenants or purchasers with properties for sale or lease. Indeed, we can compile and email or fax a submission in a matter of minutes.

Currently, our database offers over 2,175 active leases and 1,650 sales listings, all of which can be accessed by our staff via their desktop computers. Each enquiry automatically receives a submission containing properties of similar parameters to those specified by the prospective lessee or purchaser. With more than 6,000 submissions sent out per year, we are confident a fair percentage will include your property and be received by the appropriate decision maker.

King & Co’s service to clients also includes regular communication via letter, telephone or email. Aside from optional, client paid advertising, we can market your property through signage, database referrals, an expiry diary, editorial coverage, telemarketing our web presence and, importantly, “word of mouth” enquiries based on our reputation for quality listings.

King & Co is successful because we are very good at what we do. This is constantly being documented in the Courier-Mail’s weekly Prime Site section, whereby we regularly garner a disproportionate number of sales/leases and are often used as the basis for market commentary.

King & Co, as a good corporate citizen, has been in the forefront of putting a variety of issues on the public agenda for debate and ultimately, action. These include cross river tunnels, infrastructure financing, rail transport and planning.

PhilAinsworthJointManagingDirector.

JamesKennySales

JohnFiorePropertyManagement

NatashaSeveauSupport

PaulMcAvoyJointManagingDirector.

RobertFinlayLeasing

JamesByrnePropertyManagement

JacquelineVeimanSupport

WayneRobsonGeneralManager

BenDonnellyLeasing

GregStewartPropertyManagement

JacquiTurnerSupport

NathanButlerSales

RichardHallLeasing

JoelCalcuttCadet

NickWoodSupport

SamHarperSales

PatrickKerruishLeasing

TomRichmanPublicRelations

ElishaLippingwellSupport

HaydenMcNamaraSales

DarylSluggettLeasing

DavidChithamSystemsManager

RodHewittSales

DavidKnoxLeasing

ThanhNguyenAccountant

DominicGallagherSales

SimonPeppinPropertyManagement

KathHazellSupport

www.kingco

.com.au

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Response sheet

TheKing’sCounselispublishedbyKing&CoPropertyConsultantsPtyLtd(ACN120411118)of99AnnerleyRoad,Woolloongabba.

Please, fill out this form and post or fax to: David Chitham, King & Co

Property Consultants.POBox1046,CoorparooDCQld4151

Ph(07)38443222Fax(07)[email protected]

My price range:

$0–$250,000

$750,000–$1,000,000

$250,000–$500,000

$1,000,000–$1,500,000

$500,000–$750,000

$1,500,000andabove

My floor area range:

Lessthan500m2

500m2to1,000m2

1,000m2to2,000m2

Over2,000m2

I’m interested in…

Industrial

Commercial

Retail

Land

Investmentproperty

Vacantbuilding

Development

PropertyDevelopment

I’m a/an... InvestorProfessionalOwner/OccupierTenant

YES!…IwanttobeontheKing&Comailinglistandreceivepertinentmarketingmaterials!

YES!…IwanttobecontactedbyaKing&Coagent

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Telephone Fax

Email

✃

•Thistypeofpropertyrarelybecomesavailable•4,518m2 office/warehouse, 1,096m2 awning on a 16,380m2 site providing huge yard area•Welllocatedin‘bluechip’industrialarea,closetoallmajorarterialroadsandrailterminal•Drivearoundability,undercoverloading,sprinkleredwarehouseandrailsiding

Acacia Ridge

Richard Hall 0408 199 [email protected]

Warehouse, awning + yard! LEASE

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Brisbane’s industrial market prospects are growing despite the unevenness of

business confidence

The State election has been resoundingly decided in the LNP’s favour. The new Premier, the ex Lord Mayor ofBrisbane,shouldinjectconfidenceinthecommunityand business in the competency of the Government. It has also created expectations in the real estate industry which may prove difficult to sustain.

The market has bottomed and possibly turned the corner, assisted by improved credit availability. In the past year most sale and purchase transactions were less than $3 million in value with a proportionately high number under $1 million. Vacant buildings comprised the greater majority of sales withinvestments and land running way behind. This will change as confidence grows.

Although there has been a low turnover and rents and yields softened, there has not been either a drastic drop in the rentals or a blow out in yields. The bank’s low release of distressed stock into the market is the result of the continuing relatively high differential between interest rates and yields, so only non earning assets have been released. This is a very different situation to the 1990’s when we saw a mass sell off, property prices dropping by up to 40% and interest rates exceeded yields.

Although banks seem a little more relaxed with their credit having increased their LVRs for some investments to 70% and decreasing their interest rate cover demands, purchasers seeking bank support still have to surmount a very high valuation hurdle. The RBA is presently holding the cash interest rate, but the cost for capital and the banks’ pursuit for profit will drive up interest rates over the coming few years.

The continuing reluctance of somemajor financialinstitutions to extend credit for commercial,

particularly industrial property development and investment purposes, will continue to hinder growth in the market as developers are unable to bring on new stock. On the other hand, this lack of new supply will drive rental and property prices higher.

Land sales are few and this situation will prevail until bank policy changes. Though construction costs are stable, the long approval process and the high local government infrastructurel charges and rentals affordability issues continue, prices are not expected to fall further. When the existing stock is taken up, and this is not far off, and rental increases occur, land prices will begin to move upwards. The firming of yields will be last but this is a way off yet.

Leasing has been variable for some time but it has come back strongly. Leases are generally shorter but some good leases are coming through. The shorter term leases are a reflection of the lack of confidence in their businesses and the economy going forward or an expectation of better deals later. There is no obvious preference for standalone properties over strata. Discretionary decisions are still being delayed.

The stock of vacant buildings for lease and sale is steadily decreasing. The higher demand and little stock entering the market are beginning to drive rentals higher. Eventually it will become a seller’s market. Availability depends on location, style and size. In some locations and size ranges, tenant’s choice is already severely restricted.

Property markets run in cycles and while the current one is off the bottom, it is timely to get involved. Opportunities are there and will continue to be there during this languishing period of the market. For those who can afford to buy or lease do it soon.


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Prospective tenants may also take advantage of relatively lower rentals and negotiate concessions with rental review clauses to safeguard against future inflation. On the other hand, landlords need to be flexible and structure leases to be shorter or receive earlier than usual market reviews and to ensure that annual reviews include uncapped CPI.

An unheralded development over the next few years is the likely implementation of a new accounting standard which will require businesses to recognise property and operating leases on balance sheets. Under existing standards, property leases are recorded by footnotes and operating lease not at all.

Bringing leases onto balance sheets could trigger debt covenants; when leases increase a business’s liabilities over and above levels agreed with lenders.

What could this mean to the property market? Obviously property leases may shorten and or businesses may elect to purchase rather than lease

•9,279m2 General Industry corner block•2,500m2 high-bay warehouse accessed

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Best in the West LEASE

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James Kenny 0402 746 [email protected]

SALE

or, perhaps, other hybrid property arrangements may eventuate to circumvent possible debt covenant issues? n

Phil Ainsworth, Joint Managing Director April, 2012

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Industrial sales and leasing trends in and about Brisbane’s northside, southside and city fringe

Southside

Rocklea, Darra, Archerfield, Fairfield, Sherwood, Oxley, Yeerongpilly. Tennyson, Moorooka & Acacia Ridge (Achievement, Colebard & Success Streets)Sales: Rod Hewitt (0417 02 04 06) Leasing: Daryl Sluggett (0418 782 271)

At A GLAnCE

• An up in the air Cross River Rail is seriously frustrating owners and tenants

• Returnofconfidencewillseeanincreaseinprices, mostly due to a lack of stock

• Someownerswithdrawingpropertiesfromsalewhile they wait for a change in market conditions, thereby creating a shortage of freestanders

• Properties will sell or lease when owners meet the market

Sales activity is seeing owners of once flooded properties in Rocklea, Darra, Archerfield, Fairfeld and Sherwood, still suffering the stigma of that event when trying to put their stock onto the market for

what they consider a fair return. Many have, instead, withdrawn their properties in anticipation of higher amounts down the road.

Those who reduced their prices in light of the new realties, however, are happily discovering that potential purchasers find it difficult to pass up such favorable terms, particularly for stock that’s been renovated in some way. Cases in point include a number of very badly flooded, but semi-renovated buildings on Randolph Street, Rocklea, which were sold quickly for probably 20% to 25% under pre-flood prices....a bargain!

The resulting return of confidence has been as anticipated, a situation aided by a hope that new dam procedures will lessen the possibility of future inundations, while a lack of building during the 5 years of the GFC, and having no land on which to do it, has created significant pent up demand, as has the shortage created by the above noted withdrawal. Together, this means that prices should be going up during the next 18 months as the desire to find property in such a prized location outweighs the spectre of a future flood.

“Some owners withdrawing properties from sale while they wait for a change in market conditions…”

Sales and leasing activity on the mendDid you know that there are now emerging signs of improvement in SE Queensland’s industrial property market, all of which is reflected by a recent spurt in sales and leasing activity. This trend is equally impressive on all sides of the Brisbane River, in properties of every location, size, configuration and price bracket. Surprisingly, with some exceptions, it isn’t dependent on whether or not a site was flood prone or, indeed, inundated.

As might be expected, however, such a high level of takeup, combined with little new stock coming on line, hascreatedaprojectedlackofavailabilityinmostprecincts,meaningprospectivepurchasersandtenants,alike, should be increasingly prepared to pay premium amounts, particularly where quality is an issue. In other words: get in now before prices and rates climb even further! (for more detail see below)


In other words, the astute buyer will get in now while the numbers are still at their low ebb.

Leasing activity in Archerfield has been a mixed bag, though there’s been some good deals, a case in point being 110 Beatty Road, a 1,000m2 freestander that got through the floods almost unscathed and leased for $116/m2 after sitting for a bit. On the market for a while at $125/m2 is a quality 1,800m2 building at Parkview Drive, while a quality 4,500m2 space at 129 Kerry Road is available in June. The next six months should see anything of quality taken up.

In Oxley, a relatively small industrial area, there’s been no sales of consequence, while rental stock features a 3,000m2 building at 98 Factory Road that’s become available for $295,000pa.

While there’s been minimal sales, the last six months has seen some positives in Rocklea’s leasing market,

with a bit of take up facilitated by owners increasingly willing to lower rates and tenants finding this suburb the best place to be. One deal was a 7,000m2 space at 1727 Ipswich Road, which leased for $650,000 pa, or $93/m2. The next six months should see more of the same.

Sale prices in Yeerongpilly and tennyson have stabilized since the GFC. They did come down by $200m/2 but have now leveled off. In comparison to Salisbury and Moorooka these suburbs have offered purchasers a city fringe style of accommodation with more modern developments and higher office content so lending themselves to a more city fringe name tag and slightly higher per square metre prices. Their proximity to the Tennis Centre and high profile residential areas such as Chelmer, along with easy access to the Indooroopilly bridge, will guarantee future growth in the medium term, especially with the shortage of office space in the city fringe and CBD.

The last six months have seen takeup throughout Achievement Crescent, in the pocket of Acacia Ridge that also includes Success and Colebard Streets. Some vacancies have sat for awhile on Success Street, but

“… the astute buyer will get in now while the numbers are still at their low ebb.”

The firm’s commercial division acts for:

• Purchasers and Vendors of commercial real estate and offers legal due diligence reporting

• Lessors and Lessees

• Purchasers and Vendors of businesses

The Partners, Mark McAvoy and Gerard Pagliaro, between them have over 36 years experience in property transactions

The Partners offer personal, efficient service at a reasonable price.

Contact: Mark McAvoy LL.B B.Com

Level 1, King & Co Building, 99 Annerley Road (PO Box 8075) Woolloongabba Q 4102Ph (07) 3844 0188 Fax (07) 3844 1333 [email protected]

www.gmlaw.com.au

GM Lawyers is an established property law practice

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“Anyone needing to buy popular 1,000m2 and 2,000m2 freestanders will find the choices extremely limited. There is,however,some good quality stock in those size for lease.”

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probably won’t move quickly because their configuration doesn’t meet the need of the market. Meanwhile, Colebard Street has few vacancies.

Sales activity in moorooka has been dominated by Motorama with its new megastore and service centre located on Ipswich Road. Already it’s attracted small businesses, mostly related to the motor trade, but suffers a lack of vacancy. The result is an increase of prices on what does exist. As to the rental market, there’s still some vacancy and some takeup.

The on again/off again Cross River Rail has seen a number of resumed owners apply for hardship deals with the Government because they find it either impossible to sell or rent their properties or get a decent valuation whileawaitingfortheproject’sfinaldetermination.

More specifically, a lack of recent sales has made it difficult for valuers to assess resumed properties at their real value. As stock dries up, and/or gets resumed, prices will rise. The Cross River Rail resumption has already made a dent on the availability of freestanders in the 300m2 to 1,000m2 range.

Acacia Ridge, Coopers Plains, Salisbury, Willawong & LarapintaSales: Rod Hewitt (0417 02 04 06) Leasing: Richard Hall (0408 199 919)

At A GLAnCE

• Businesseshavebeenmovingbackinandprices have stabilized

• Anyoneneedingtobuypopular1,000m2 and 2,000m2 freestanders will find the choices extremely limited. There is,however,some good quality stock in those size for lease

• It’sexpectedpriceswillrisesoonerthanlater

• Rentalrateshavestabilizedoverthelastsixmonths, although there continues to be some office fitout or rent free incentives thrown in by the lessor

Businesses from the flood prone parts of the precinct have been moving back in and prices have stabilized. In fact, with the return of interest, particularly from people looking to relocate, coupled with a shortage of stock, in part due to a lack of building, it’s expected prices will rise sooner than later.

More specifically, anyone needing popularly sized buildings between 1,000m2 and 2,000m2 will find the choices extremely limited, even more so following the sale of a 1,793m2 freestander on an acre of land at 57 Meadow Avenue, Coopers Plains, for $2,200,000; the $1,350,000 paid for a 1,334m2 freestander at 19 Lancashire Street, Acacia Ridge; the competitive because of its age $1,350,000 that purchased a 2,230m2 freestander at 246 Evans Road, Salisbury, while a 1,964m2 building at 8 Gay Street, Coopers Plains, sold at auction.

The leasing market in this precinct saw a scarcity of smaller vacant tenancies, and those that did occur appeared to be eventuating due to a renter’s misfortune or simply left a space, but not for the purpose of relocating. There is, however, some good quality stock

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in the 1,000m2 to 2,000m2 range. Meanwhile, rental rates have stabilized over the last six months, although there continues to be some office fitout or rent free incentives thrown in by the lessor. That being said, the number of vacant properties for rent have stayed unchanged, a situation that will remain static until there’s an improvement in business confidence.

Crestmead & Browns Plains Sales: Sam Harper (0423 380 514) Leasing: Richard Hall (0408 199 919)

At A GLAnCE

• Crestmeadsawveryfewsalessincethefirstofthe year due to its tightly held nature

• LeasingactivityinCrestmeadaswellasnearbyBrowns Plains remains slow but stable

Despite high demand, Crestmead saw very few sales since the first of the year due to its tightly held nature. That being said, there’s plenty of land available for

owner/occupiers, particularly in the Government estate, where parcels can be found between 1,700m2 and 1.1 ha, all coming with access via a 25m road. In fact now couldn’t be a better time to buy and build there as labour and materials won’t be getting any cheaper.

Meanwhile, leasing activity in Crestmead as well as nearby Browns Plains remains slow but stable.

Southwest Corridor including Carole

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“…when things finally do pick up, and they soon will, prospective renters should be

reminded that there is a good range of stock available throughout this precinct, much of it

with hard to find cranes.”

Park, Darra, Heathwood, Oxley, Richlands, Seventeen Mile Rocks, Sumner Park & WacolSales: Dom Gallagher (0411 387 146) Leasing: Ben Donnelly (0438 643 330)

At A GLAnCE

• Theresourceandminingindustryhasbecomethe backbone of the leasing market

• Thereisagoodrangeofrentalstockavailablethroughout this precinct, much of it with hard to find cranes

• TheSouthwestCorridorenjoyedagoodrunof leasing deals until Christmas but has seen interest drop off since then

• It’shopedthattheactiveleasingmarketherewillflow onto sales, particularly if more owners present realistic prices and interest rates become lower

• Anythinggoodcomingontothemarketwillbesnapped up as stock here tends to be tidy, well presented...and dry!

While the Southwest Corridor, which includes Carole Park, Darra, Heathwood, Oxley, Richlands, Seventeen mile Rocks, Sumner Park and Wacol, has been a bit tight where sales activity is concerned, itenjoyedagoodrunofleasingdealsuptoChristmas.

Unfortunately, since then interest has dropped off. People are looking but it’s become difficult getting them to commit. That being said, when things finally do pick up, and they soon will, prospective renters should be reminded that there is a good range of stock available throughout this precinct, much of it with hard to find cranes.

More specifically, Carole Park has seen no sales deals

due to a lack of confidence in the market, combined with owners’ reluctance to be flexible with their prices, or have no need to sell. That being said, there’s not much stock available, anyway, save for a 2,515m2 freestander at 195 Cobalt Street, which can be bought for around $3 million.

As to leasing deals, a 1,100m2 office/warehouse featuring a couple thousand square metres of concrete hardstand at 200 Cobalt Street was leased for $153,000 pa to a Rockhampton based firm with relations to the mining sector. Similarly, a joint venture involved with the gaspipeline from Chinchilla through to Rockhampton, sublet a 1,000m2 space at 8 Forge Close. As elsewhere in Brisbane, the resource and mining industry has become the backbone of the leasing market.

Sales stock in Darra includes some units on Archerfield Road, many of which have been sitting for a while despite their high office component. Then, again, this might be the feature that their owners think will ultimately achieve the elevated prices they’ve been asking. It’s hoped that the active leasing market here will flow onto sales, particularly if more owners present realistic prices and interest rates become lower.

While Heathwood has some large stock for sale, little of it has moved. It’s hoped this will change, should the high interest shown for an investment property at 81 Stradbroke Street be any measure. It’s tenanted on a term of 10 years to a trucking company and is on the market for $6,150,000.

Over the years this suburb became fairly tightly held, but now has some vacancies due to a general lack of confidence, offset a bit, however, by mining and resource industry needs. Stock for lease includes some at 41 and 47 Moreton Street, 14 and 25 Moreton Street,108 Stradbroke Street, 62 Stradbroke Street and 21 Stradbroke Street.

Oxley has some Future Industry land for sale, a case in point being the 1.6ha parcel at 86 Blunder Road. A distress offering, it is receiving much interest due to its good exposure.

Though tightly held, Richlands has seen some good sales, including the $2,050,000 paid for a 1,440m2 property at 81 Fulcrum Street, a deal which also included Statewide Cleaning Cloths’ commitment to a $164,000 pa lease on a term of 6+3+3 years. In fact

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“…most of the land that has come on line in this area has been taken up, forcing developers to look towards the Yatala Enterprise Area (YEA) for supply.”

anything good coming onto the market will be snapped up as stock here tends to be tidy, well presented...and dry! The next six months should see a few properties become available on streets off of Fulcrum Street.

In Seventeen mile Rocks a lot of development is taking place in the relatively new MetroWest Business and Technology Park and has been attracting businesses wanting to move from older stock.

The leasingmarket is just the opposite, with potentialtenants increasingly drawn to other, more accessible, suburbs,even with it being flood free. This outflow has resulted in a lot of vacancies, particularly smaller spaces on Staple Street, and in the MetroWest estate, a situation thatwouldhavebeenunheardofjustafewyearsago,when it seemed nothing was available. In any case, there’s a few units left in the Van Riet development in Bluestone Circuit, Jamieson’s at 149 Bluestone Circuit, Guy Burgess still has some at 152 Bluestone Circuit, while Gary McNamara has one unit left at 120 Bluestone Circuit. There also a scattering of freestanders, either under construction or available.

While Sumner Park has some good developments, those willing to take a punt might want to look at some very good units at 11 Forge Close, which, for example, has 180m2 units for sale at an affordable $275,000. Similarly, there has been some heavily discounted leasing deals, particularly for a building on Neon Street.

Wacol has always been a proven industrial area and continues to attract much interest. The resulting sales that took place were generally for 300m2 to 400m2 units on McRoyle Street and Blunder Road. It’s expected the next six months will see an increase in sales activity.

The leasing market has seen less activity than usual, and many of these deals were for yard space at Coulson Street, where a 5,000m2 parcel went for $12/m2 and an 8,000m2 lot on Tile Street was taken up for $17/m2. In addition, a new 429m2 unit at 3/1274 Boundary Road was rented for 5 years at $125/m2.

Available mid year is the old Waco Kwikform building, a 2,500m2 shed with 450m2 of office on a 1ha parcel of land plus a large amount of concrete hardstand. A rare offering that should attract a fair bit of attention, particularly with its good frontage to Boundary Road.

Logan Motorway Corridor including Meadowbrook, Kingston, Loganlea, Larapinta and BerrinbaSales: Sam Harper (0423 380 514) Leasing: Pat Kerruish (0422 702 504)

At A GLAnCE

• Availableindustriallandhasbeendryingupalong the Logan Motorway Corridor

• Thisshortagehasforcedmanydeveloperstolook towards the YEA for supply

• Prospectivetenantswillfindonlysecondarystock for lease

During the last six months available industrial land has been drying up along the Logan motorway Corridor, mostly due to the buying up by owner/occupiers, with very little going to developers. While there were some estates that came on line during this period, they offered only a few large blocks, and a scattering of smaller ones. The result is that most of the land that has come on line in this area has been taken up, forcing developers to look towards the Yatala Enterprise Area (YEA) for supply.

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• SomesalesstockintheYEAhasbeenputon the market for as low as $220/m2. Quite a come down from the $400/m2 developers were achieving at its peak four years ago

Activity in the m1 Corridor’s Yatala Enterprise Area remains pretty much the same, with a huge amount of land yet to be brought on line and a variety of serviced blocks in the 2,000m2 plus range ready to go for very competitive prices. Indeed, some of the latter have been put on the market for as low as $220/m2. Quite a come down from the $400/m2 developers were achieving at its peak four years ago. Unfortunately, this drop has still not stimulated much interest from prospective buyers, most of whom remain cautious and probably won’t reach into their pockets until there’s a regained confidence or when the banks increase lending. On a more optimistic note, when the market starts takingoffmanywill besorry theydidn’t jump innowaspent up demand will surely boost prices.

Meanwhile, a couple of substantial sales did take place including the $2,100,000 paid for a 1,520m2 investment at 99 Lahrs Road, Ormeau, while $1,200,000 bought a 2,004m2 office/warehouse at 38 Notar Drive, Ormeau.

•PremiumfloodfreelocationinAcaciaRidge•6,010m2 of warehouse and wash bay•1,560m2 of presentable two level office•11,778m2 of hardstand and car parking•2x5Tcranes

•Accesstowarehousevia6rollerdoorsallowingdrivethrough access

•Veryraretofindallofthisinoneproperty•Phonetomakeanappointmentforinspection!

Acacia Ridge


Sorare–cranes,yard,washbay,warehouse&office LEASE

Meanwhile, a few buildings remain available for sale, including a 1,600m2 freestander at Prospect Place, Berrinba. Prospective tenants, however, will only find secondary stock, as anything new would have to be a D&C or precommited on an existing DA.

M1 Corridor including the Yatala Enterprise Area (Yatala, Ormeau & Stapylton), Slacks Creek, Underwood, Woodridge, Springwood, Shailer Park, Loganholme and BeenleighSales: Sam Harper (0423 380 514) Leasing: Pat Kerruish (0422 702 504)

At A GLAnCE

• There’sstillmovementinbothleasingandsales,which should grow into the foreseeable future

• Whenthemarketstartstakingoff,anditwill,manywillbesorrytheydidn’tjumpinnowaspent up demand will surely boost prices

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In addition, $1,050,000 purchased a 754m2 building at 12 Christensen Road, Stapylton.

As to the leasing market, there’s only a few new spaces about to come line, both being built by the same developers. The only alternative is to rent the limited number of secondary stock that is available, albeit only 3-4 years old and in very good condition.

The rest of the industrial suburbs along the M1 Corridor have only a meagre amount of new land for development, meaning businesses must relegate their interest to existing, often older small units. That being said there’s still a bit of activity, both leasing and sales, which should continue into the foreseeable future.

Northside

Australia TradeCoast areas of Eagle Farm & PinkenbaSales: James Kenny (0402 746 673) Leasing: David Knox (0408 548 281)

At A GLAnCE

• Strongdemandstillexistsforbuildingsbetween1,000m2 - 2,000m2, along with small strata units

• Alackofnewconstructionhasseensupplydryup

• Thenextsixmonthswillcontinuethemomentumseen at the end of last year

• AustraliaTradeCoastcontinuestobehighlysoughtafter by prospective tenants due to its proximity to thecity,airportandmajorarterialnetworks

The sought after Australia tradeCoast suburbs of Eagle Farm and Pinkenba continue to be popular amongst owner/occupiers, which are especially interested in buildings between 1,000m2 and 2,000m2 along with small strata units. A lack of new construction, however, has seen supply dry up and larger requirements have taken up D&C options in the successful 150 ha master

planned TradeCoast Central estate, situated on the old-airport site. Of note, two larger transactions were consummated towards the end of 2011, one being 59 Bancroft Road, Pinkenba, which sold for $6.8million, while 839 Kingsford Smith Drive went for $6.5million. This has resulted in minimal existing stock over 5,000m2 being available, with prospective purchasers having to explore different options to satisfy their requirements. The next six months will continue the momentum seen at the end of last year and lead to a shift in demand towards premium properties.

In reference to this precinct’s leasing market, it continues to be highly sought after by prospective tenants due to its proximity to the city, airport and major arterialnetworks....an attraction that has been further boosted by over $1 billion of infrastructure investment over the past 5 years.

Although there continued to be significant take up of existing rental stock throughout 2011 and into early 2012, rates on B grade offerings are still softening. On the other hand, higher quality or functional spaces will continue to hold their value, albeit with longer vacancy periods. Enquiry regarding the TradeCoast Central should remain strong and bring renewed interest along with modern building innovations. Key tenants already include Reece plumbing and fixture company’s now completed state distribution centre, which, at 26,500m2, isthelargestsite intheestate.It joinsSasgarfireandrescue equipment distributor and Energex as the latest companies to call TradeCoast Central home.

Meanwhile DHL recently announced it would construct a new purpose-built $15m facility, including a processing gateway and offices at Brisbane Airport (within Australia TradeCoast). This investment is part of a 10-year strategic initiative to invest in Queensland’s expected growth. Located at the airport’s 44 ha Da Vinci Precinct, the new facility will be developed by Brisbane Airport Corporation (BAC). DHL has entered into a 10 year lease with BAC, with construction due to commence in April.

“The next six months will continue the momentum seen at the end of last year and lead to a shift in demand towards premium properties. ”

“The rest of the industrial suburbs along the M1 Corridor have only a meagre amount of new land for development, meaning businesses must relegate their interest to existing, often older small units.”


Last of the small lots!

Sales yard with great exposure

City Fringe freestanding office!

•1,017m2 site in popular Loganholme•Functional250m2 shed•Redevelop,occupyorlease!•Valueformoney

•Approvedwashbay•Refurbishedsalesoffice•2,000m2 fully sealed•Greasetrapinplace

•Licensedcaryardor display yard

•Superblyappointedfreestanding office•627m2 GFA

•Ampleonsiteparking•Qualityfitoutthroughout

Sam Harper 0423 380 [email protected]

Pat Kerruish 0422 702 [email protected]

Rod Hewitt 0417 02 04 [email protected]



Robert Finlay 0411 747 [email protected]

SALE / LEASE

SALE / LEASE

LEASE

Contact the Property management Team on 3844 3222

[email protected]

Service & Experience


P R O P E R t Y m A n A G E m E n t

resultsWE gEtSolve your property concerns and protect your property investment by calling King & Co now!

We manage industrial properties of all sizes

Our clients range from small investors to major property investment groups

Our tenants include: toll Holdings, Fosters Australia, mainfreight Distributors, Waco Kwikform and Loscam

Our property managers are supported by specialist industrial leasing and sales teams

Our state of the art CmS computer program ensures full reporting and regular payments of rent to owners

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“There have been a few sites of late snapped up by savvy developers, many of whom purchased secondary, run-down facilities with the view to refurbish and lease out at a higher rate, therefore increasing value adding potential.”

The processing gateway will include high-speed re-weigh technology, improving outbound processing between 10 and 15 per cent. Within the facility, there will be offices housing over 100 DHL personnel covering operations, sales, customs brokerage, gateway export and import, with sufficient capacity to accommodate future growth.

Northern Corridor including Banyo, Geebung, Virginia & NorthgateSales: James Kenny (0402 746 673) Leasing: David Knox (0408 548 281)

At A GLAnCE

• SinceChristmashighqualityinvestmentproperties continue to be popular with investors in order to maintain healthy portfolios

• Overall,thereisstillaseverelackofavailabilitythrough the northern corridor

• Vacantbuildingsarestillbeingsoughtafterbyowner/occupiers and, with a general lack of availability, many purchasers have been forced to lease premises as opposed to buying

• Leasingenquiryhasimprovedacrossall size ranges

• Therehavebeenafewsitesoflatesnappedupby savvy developers, many of whom purchased secondary, run-down facilities with the view to refurbish and lease out at a higher rate, therefore increasing value adding potential.

The traditional industrial areas of Banyo, Geebung, Virginia and northgate, known collectively as the northern Corridor, saw a surge in sales transactions towards the back end of 2011. Since then high quality investment properties continue to be popular with investors needing to maintain healthy portfolios. Overall, there is still a severe lack of availability throughout the Corridor, meaning these investors must be prepared to pay premium prices. Of note is 26 Crockford Street, Banyo, which was sold off-market by King & Co for $2.5 million to private investors, representing a yield of 7.25%.

Vacant buildings are still being sought after by owner/occupiers and with a general lack of availability, many purchasers have been forced to lease premises as

opposed to buying them. Again, small strata units continue to be popular, as are the larger freestanding sites, of which there is minimal stock. King & Co was also responsible for another one of the major salestransactions in this precinct, a 1,087m2 freestander at 17 Huntington Place, Banyo, that was sold off-market to a local owner/occupier for $1.8million, or $1,655/m2, and resulting in one of the higher premiums achieved there.

There’s not much vacant land for sale either, with, for example, only two blocks remaining in Depot Street, Banyo, along with a few sites available within the back pockets of Virginia. Speculative development has been non-existent, as finance and credit limitations still prove to be tough obstacles. There have been a few sites of late snapped up by savvy developers, many of whom purchased secondary, run-down facilities with the view to refurbish and lease out at a higher rate, therefore increasing value adding potential.

The next six months should see an increase in demand for sales stock come from existing tenants who will look to enter the market and buy their own facilities. Only the availability of stock will ascertain whether or not these requirements can be satisfied.

As to the leasing market, this industrial precinct continued to show its strength and desirability in the months leading into Christmas, then right up until March. Leasing enquiry has improved across all size ranges and there has been a large take up of a previous glut of vacancy in the 1,000m2-2,000m2 size range. Rents achieved, while not breaking any records, have been solid with Land Tax being recovered in nearly all leases negotiated by King & Co. It should be noted that when Land Tax is recoverable as part of the outgoings, which, in turn softens the net rental rate that is achieved as all tenants look at the gross rent payable when budgeting for a move.

Meanwhile, all key infrastructure projects that have


been in the pipeline over the past few years have been completed or are nearly so, which, together, has, or soon will, significantly improve access in and out of the area, and therefore, demand. The Airport Link is scheduled for completion in mid 2012 and will connect the Inner City Bypass and the Clem 7 to the East-West Arterial Road, which leads to the Brisbane Airport. This will alleviate many of traffic issues that have hamstrung Industrial northside precincts for years and will only serve to increase their popularity and demand.

Outer North including Brendale and North LakesSales & Leasing: Sam Harper (0423 380 514)

At A GLAnCE

• BrendaleisnolongeracheaperoptiontoBrisbane’s northern suburbs

• Mostbuyersandtenantscomefromminingandresource related industries

• Thelion’sshareofdealsareforlandintheNewBase Enterprise Park

• Stockland’sNorthLakesBusinessParkawaitsCostco (maybe)

The outer north suburb of Brendalehasenjoyedquitea bit of enquiry, as well as a healthy number of deals. Most of this activity has been driven by mining and resource related businesses and generally involves the leasing of freestanders over 1,000m2, as well as land for development or D & Cs. While an oversupply of units has decreased prices a little, gone, however, are the days when Brendale was the cheaper option to its more inner north competitors like the Northgate/Virginia precinct as its popularity has eliminated all price differentials.

A large number of these transactions have taken place within the New Base Enterprise Park on Leitchs Road, which comprises 85 ha of land and is Brendale’s largest industrial development. Indeed, it’s become the main GI zoned node servicing north Brisbane and can provide

•Veryversatilesite•577m2 office and showroom•Fullyairconditionedandcarpeted

office and showroom•Idealposition•Singlelevel•Opportunitynottobesneezedat•Availablenow!

Rocklea


Prime corner position LEASE

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“Go Between Bridge allows Milton businesses to easily check out West End.”

“As elsewhere in the city fringe, there are no bargains, even if flood prone.”

fully-serviced, flexible space from 2,100m2 to 14 ha. For example, early in March saw privately owned Bielby Holdings, a civil engineering construction firm, pay $2,350,000 for a holding yard in the estate, upon which they’re relocating their entire operations from Brisbane’s southside. Another big player due to move here in March is BJ Ball Papers, which has built a 12,600m2 distribution facility.

Meanwhile, Stockland’s 55 hectare north Lakes Business Park has seen a few significant land sales, the main one being the rumored purchase for between $10 million and $15 million of a 6 ha site by US retail giant Costco for one of its super stores. If true, it will be opposite a recent $12 million sale of land which will secure the likes of IKEA and Woolworths’ Master Home Improvement store. Needless to say, this would have a positive effect on land values, both within North Lakesanditssurrounds,notjustforretailallotmentsbutindustrial as well.

City Fringe

City Fringe including the West End, South Brisbane, Woolloongabba, East Brisbane & CoorparooSales: Nathan Butler (0403 235 173) Leasing: Rob Finlay (0411 747 165)

At A GLAnCE

• Salesandleasingactivityhamstrungbyalackofstock, low valuations and the spectre of flooding

• Thelackofstockwilleventuallyputanupwardpressure on rates and prices

• Ownerswhodon’tneedtosell,willonlydosoifthe price is right

• GoBetweenBridgeallowsMiltonbusinessestoeasily check out West End to see if they can get a better deal

• Aselsewhereinthecityfringe,therearenobargains, even if flood prone

• Someverygoodqualityoffice/warehousesthathave been up for lease for quite a while are finally starting to be taken up

Despite the high demand, sales activity in the West End precinct remains limited due, as ever, to its tightly held nature. While there are around 10 properties for sale, only 3-4 will be picked up due to their more reasonable pricing. That being said, word has it, that even owners who don’t need to sell, will do so if the amount is right. Meanwhile, a number of potential sales have been hamstrung by softer than anticipated valuations.

On the market for $1,500,000 is a 400m2 office/warehouse at 284 Musgrave Road, a price that compares well with some recent transactions in the area. Then there’s been a high level of enquiry for 5 Cameron Street and 8 Ferry Street, while, on the other hand, a 357m2

office/warehouse at 17-19 Kurilpa Street remains on the market for under $2,950,000, largely because it was effected by the flood and suffers too little parking for a building that size. Meanwhile, next door, at 15 Kurilpa Street, a 357m2 office building was sold for $1,123,500, after it was gutted and refurbished.

The West End saw little movement in the leasing market either, though this mostly had to do with the spectre of future flooding and traffic congestion, making it primarily attractive for those who need to be there or benefit from the Go Between Bridge’s connection with Milton. In fact a good deal of enquiry has come from Milton based businesses who want to check out the West End to see if they can get a better deal.

Leases that occurred include a 1,694m2 office/warehouse at 90 Victoria Street, while $160,000 net pa + GST is being committed to for a larger space at 28-30 Bank St.

As has been standard in the more recent past, South


“The North City Fringe is enjoying filling the needs of the booming resource and mining sector…”

Brisbane’s sales and leasing activity is almost completely for commercial space.

While industrial stock for sale in Woolloongabba tends to be older, medium sized metal clad office/warehouses, it’s still being snapped up quickly, a case in point being the $1,100,000 to $1,200,000 paid for a 890m2 freestander at 7 Lucinda Street. Otherwise, there’s some smaller spaces on the market but in a very limited amount due to the area being very tightly held. As elsewhere in the city fringe, there are no bargains, even if flood prone.

On the leasing side, there’s been the takeup of a few smaller industrial spaces that have sat for awhile, one example being an office/warehouse unit at 3/36 Hampton Street. There isn’t, however, a lot of traditional sheds available, a shortfall made even more so once some of the remaining offerings are rented, which should happen quickly. This should be a good sign for lessors and developers as it will push rates up. Meanwhile, commercial space is moving quite well, witness the quick takeup of 101 Annerley Road and 28 Balaclava Street.

The East Brisbane/Coorparoo precinct continues to have minimal stock for sale, though a 200m2 unit is on the market for $725,000 at Birubi Street. Recent purchases include the undisclosed amount paid for a building at Holdsworth Street, while a 465m2 investment property was purchased for $1,320,000 at 65 Caswell Street

Some very good quality office/warehouses that have been without a tenant for quite a while are finally starting to be taken up, including a 360m2 space at 11 Birubi Street, a 574m2 office/warehouse at 26 Cambridge Street, a 325m2 unit at 2/911 Stanley Street. Meanwhile, a 500m2 office/warehouse was rented at 11 Castlemaine Street. Together these transactions reduced the level of availability, which should, during the next six months, go a long way in pushing up rates for whatever remains.

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www.napierblakeley.comMelbourne Brisbane Sydney03 9915 6300 07 3221 8255 02 9299 1899

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North City Fringe including Fortitude Valley, Newstead, Bowen Hills & AlbionSales & Leasing: Nathan Butler (0403 235 173)

At A GLAnCE

• TheNorthCityFringeisenjoyingfillingtheneedsof the booming resource and mining sector

• Althoughthere’sspaceforleaseintheBowenHills/Newstead precinct it’s mostly commercial

• LikeinFortitudeValley/BowenHills,Albion’ssalable properties are difficult to find due to its tightly held nature or are sometimes overlooked by too high asking prices

While Fortitude Valley has seen minimal sales, its leasing market is enjoying filling the needs of thebooming resource and mining sector, which sees the Valley as a less expensive alternative to the near capacity CBD, the same for the rest of the North City Fringe. Unfortunately, there’s not a lot of stock for lease (even less for sale). When found, however, a tenant will pay up to $350/m2 for quality office space and $100/m2 for a basic warehouse. Those for sale can achieve up to $3,000/m2 for commercial space and $2,500/m2 if industrial.

The newstead/Bowen Hills precinct has only a meagre

supply of industrial stock for sale. What is available includes a 430m2 freestanding Bowen Hills site, which has been on the market for $2 million, a price that will have to be reduced before it will sell.

Although there’s some space for lease it’s mostly commercial, as there are only a few industrial areas left. An example of the former is the $180/m2 being asked for an office space on Breakfast Creek Road, or the $300/m2 landlords are getting for tenancies along the bottom of Doggett Street and Commercial Road. As example, a 781m2 warehouse at 18 Doggett Street, which can easily be converted into bulky goods use and/or a showroom, is expected to achieve $105,000 pa gross, a not surprising amount considering its exposure, proximity to James Street and high level of interest.

Albion’s salable properties are difficult to find due to its tightly held nature or are sometimes overlooked by too high asking prices, even if slightly so... a case in point being an office/warehouse at 59 Albion Road, which has received much interest but has a bit of “sticker shock.” Then, again, a property at Hudson Road is going to auctionandjustmightsellastheownerhasreduceditsprice considerably. Meanwhile, there’s been quite a few appraisals but little action has resulted.

As to leasing activity, there’s been some good, smaller deals including a 280m2 space at 16 Hutcheson Street, Albion, which went for $40,000 pa, while a 194m2 space at 2/45 Crosby Road, Albion, was taken up for $27,160 pa.

Prized sublease opportunity•Provenlocation,closetoBrisbane Markets•228m2 office/warehouse•Floodfreeunit

•Availablenow!


LEASE

Prime corporate complex•132m2 & 258m2 quality office & office/warehouse•A-gradefitout&functionality•Ampleonsitecarparking

•MinutesfromCBD&ICB

Nathan Butler 0403 235 [email protected]

LEASE


Eastside

Eastern corridor including Morningside, Murarrie, Tingalpa, Hemmant, Mansfield & LyttonSales: Hayden McNamara (0407 730 530) Leasing: Rob Finlay (0411 747 165)

At A GLAnCE

• Anythingthat’sreasonablypricedandfitsthemarket in terms of configuration and access will be picked up quickly

• Thenextsixmonthsshouldseeafewmoregoodofferings come on line

• Whilepurecommercialstockhasbeensittingaround, office/warehouses with a high office component have been faring well

• ThePortConnectprojectshouldstimulategrowthand increase Australia TradeCoast capacity when it comes on line in 2013

During the last six months morningside has seen a number of buildings come onto the market for sale, with many of them being purchased. One of the larger deals includes the $6,600,000 paid for a 4,000m2 office/warehouse cold storage facility on 8,000m2 of land at 20 Manton Street. During the rest of the year we’ll most likely see a few of the smaller units that have been hanging around for a bit finally be purchased.

Morningside’s leasing market has few large spaces available, but those that do exist tend to be of good quality and should be taken up in short order. These include a 1,300m2 freestanding office/warehouse at 13 Breen Place, a 1,900m2 space at 457 Lytton Road, while there’s a 1,200m2 vacancy at 350 Lytton Rd.

The rest of the stock is smaller and rapidly being

“… we’ll most likely see a few of the smaller units that have been hanging around for a bit finally be purchased.”

•Multipletenancycombinationsavailable (911m2, 1,099m2 or 2,010m2)

•1,767m2 fully fenced & secure hardstand•Wellpresentedrefurbishedoffices

•Highbaywarehousewithmultiplerollerdoors•Large3phasepowersupply•Ampleonsiteparking•MotivatedLessor…Keentododeals.

Darra

Ben Donnelly 0438 643 [email protected]

Huge Ipswich Motorway exposure LEASE

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“…the next six months should see this high level of activity continue, making everyone happy.”

rented, all of which should see pressure mount for increased rates once supply dries up and there’s a return of confidence.

murarrie has seen a good number of sales, including the $949,000 paid by an owner/occupier for a 360m2 unit at 9/33 Queensport Road, while $1,400,000 was paid for an 814m2 building at 40 Rivergate Place. The next six months should see deal many deals completed if the high level of enquiry at present is any measure.

As to the leasing market, while pure commercial stock has been sitting around, office/warehouses with a high office component have been faring well since the holidays, two examples being medium sized spaces at Archimedes Place. In fact, anything that’s reasonably priced and fits the market in terms of configuration will be picked up quickly.

Further south, into tingalpa, there’s been only a couple of sales, both for smaller stock and selling at market rates, which means that most owners have been realistic about their asking prices. Deals include the $380,000 paid by an owner/occupier for a 287m2 property at 8 Proprietary Street, while $278,000 bought a 125m2 space at 45 Proprietary Street.

Meanwhile, leasing stock that has been sitting for quite awhile has been taken up, the same for spaces which have recently come onto the market...providing of course, they have the basics of good quality industrial buildings, like proper site configuration or ease of access, something usually missing in the slow movers. Then, again, there’s some good spaces that have sat for more than they should and for no good reason. No matter, the next six months should see this high level of activity continue, making everyone happy.

Hemmant has seen a high level of enquiry leading to a couple of big sales, one being the almost $3,000,000 paid for a 1,840m2 building at 128 Gosport Street. There remains a few good properties for sale at realistic prices. The next six months should see a few more of these offerings come on line, probably in the 1,000m2

plus range.

Leasing activity has been constrained by a lack of stock, made even more so by the sale of a 5,500m2 office/warehouse at 1 Wyuna Court. Meanwhile, lessors with good quality properties enjoying a high officecomponent are doing very well and, as a result, putting an upward pressure on rates.

Corporate office for less than $200/m2

•Nearnew205m2 office/warehouse•Outstandingcomplex•HugeexposuretotheGateway

•Highqualityairconditionedoffice over two levels•Fourcarparksincloseproximity to unit

David Knox 0408 548 [email protected]

LEASE

Evans Road exposure!•Strategicallylocatedonthecornerof busy Evans Rd & Precision St•502m2 GFA on 1,136m2

•Lowsitecoverofonly45%

•Multiplerollerdoorstowarehouse•EPA/Councilapprovedwashbay•Investorsortenantsshouldconsider this opportunity!

Rod Hewitt 0417 02 04 [email protected]

SALE

“…anything that’s reasonably priced and fits the market in terms of configuration will be picked up quickly.”


Premium Industrial on the m1•Brandnew921m2 office/warehouse•Clearspanwarehousewithaccess via three large roller doors

•CBDQualityofficeovertwolevels•StrategiclocationontheM1/Logan Motorway Interchange•Highcarparkingratio

Pat Kerruish 0422 702 [email protected]


SALE

Prime Acacia Ridge office/warehouse•Qualityofficespace•Frontunitwithhighimpact•Moderntiltpanelbuildingdesign with great internal height

•Excellentaccessincludingtworoller doors•Securecorporatecomplex•Flexibleowner,availablenow


LEASE

Outstanding Engineering Facility•Buildinghashugepowerandmultiplecranes•Verylowsitecoverage•Excellentengineeringfacility•1,830m2 steel framed building with 160m2 office

Dominic Gallagher 0411 387 [email protected]

SALE

Contact the Property management Team on 3844 3222

[email protected]

getting Results

& Solving Problems


P R O P E R t Y m A n A G E m E n t

resultsWE gEt

Expert staff

Proven systems including 24/7 on call arrangement

timely and superior problem solving skills ensure the best outcomes for tenants and owners alike

Solve your property concerns and protect your property investment by calling King & Co now!

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Flora and fauna passage, ‘Green Bridge’ minimises impact on local ecosystem

New overpass with cycle facilities

New signalised intersection

Cul-de-sac at Freight Street

Cul-de-sac at Pritchard Street

Heavy vehicle interception site


New motorway-standard link from the Gateway Motorway to Pritchard Street

Lindum Road on and off-ramps

To PortTo City

Duplication of Oxbow Bridge Duplication of Bulimba Creek Bridge

Duplication of sewer crossing

Energex access road

Beginning of motorway extension

Duplication of existing motorway


Transport and Main RoadsConnecting Queenslandwww.tmr.qld.gov.au

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Ever popular mansfield has a high level of enquiry but remains tightly held. What’s on the market are a couple of units at Dividend Street, while land is being developed on Secam Street, which will mostly result in units and a limited number of freestanders.

In Lytton the major event has been the 51,725m2 Kmart site, which is located on 11.6ha of land and will be completed in June. With an initial 15 year lease term, this development comprises a pre-committed warehouse and office, representing the consolidation of three properties (one within ATC and two others in Acacia Ridge) into one large facility. It is being developed on land acquired from the Queensland Government’s Property Services Group.

Otherwise, there’s very little sales and leasing activity due to a shortage of stock..

Meanwhile, the Port Connect project, $385,000,000upgrade of the Port of Brisbane Motorway (PoBM), is being undertaken by the Queensland Government as part of its long-term plan to meet the transport needs of the Port of Brisbane and the Australia TradeCoast.

Port Connect will deliver a duplication of the existing two-lane motorway, as well as a three kilometer extension. Oncompletionof thisprojectmid2013, thePoBMwillbe four lanes from the Gateway Motorway through to Pritchard Street, Lytton.

One of the most important features of this extension is it will eliminate the need for heavy vehicles to use Lytton Road on their way to the port.

As well as an upgrade and extension of the Motorway, theprojectalsoincludesanewinterchangeatPritchardStreet with an overpass between Lytton Road and Export Street. This interchange will allow for local trips and provide access to the motorway. n










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Energex access road





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“The Port Connect project should stimulate growth and increase Australia TradeCoast capacity when it comes on line in 2013.”











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•Modernwarehouse•Hugeexposure•Excellent2streetaccess

•Only15minutestoCBD•Craneavailable•Qualityneighboursinaqualitycomplex

Rocklea


Freestander with exposure to Ipswich Road LEASE










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Energex access road





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Southside

Leasing

Richard Hall (0408 199 919)

• 114 Balham Road, Rocklea 7,086m2 freestander @ $770,000 pa

• 46 Dulacca Street, Acacia Ridge 2,545m2 freestander @ $279,950 pa

• 256 Bradman Street, Acacia Ridge 1,226m2 freestander @ $140,990 pa

• 1/6 Overlord Place, Acacia Ridge 932m2 unit @ $90,000 pa

• 27 Nariel Street, Albion 725m2 freestander @ $60,000 pa

• 33B/284 Musgrave Road, Coopers Plains 741m2 unit @ $59,280 pa

• 135 Orange Grove Road, Coopers Plains 300m2 unit @ $48,000 pa

• 26/258 Musgrave Road,Coopers Plains 300m2 unit @ $40,500 pa

• 1/29 Annie Street, Coopers Plains 310m2 unit @ $27,900 pa

• 2/21 Alton Street, Coopers Plains 245m2 unit @ $22,000 pa

Daryl Sluggett (0418 782 271)

• Boundary Road, Carole Park 3,152m2 freestander @ $331,771 pa

• Cobalt Street, Carole Park 3,800m2 freestander @$299,000 pa

• Archerfield Road, Richlands 1,927m2 freestander @ $144,525 pa

• Beatty Road, Archerfield 947m2 freestander @$110,000 pa

• Ipswich Road, Rocklea 672m2 unit @ $86,000 pa

Recent sales and leasing transactions: top 10• Boyland Avenue, Coopers Plains 794m2 unit @ 80,000 pa

• Beaudesert Road, Archerfield 555m2 unit @ $65,000 pa

• Ipswich Road, Rocklea 460m2 unit @ $52,900 pa

• Ellen Street, Moorooka 310m2 freestander @36,000 pa

• Buttonwood Place, Acacia Ridge 280m2 unit @$30,000 pa

Ben Donnelly (0438 643 330)

• 81 Fulcrum Street, Richlands 1,440m2 freestander @ $165,000 pa

• 200 Cobalt Street, Carole Park 1,000m2 freestander@$153,000 pa

• 616 Boundary Road, Richlands 1,000m2 unit @ $150,000 pa

• 3/1274 Boundary Road, Wacol 429m2 unit @ $53,625 pa

• 67 Boundary Road, Carole Park 3,150m2 freestander @ $331,000 pa

• 17 Machinery Street, Darra 1,078m2 freestander @ $100,000 pa

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• 3/12 Archimedes Street, Darra 1,123m2 unit @ $100,000 pa

• 24 Pradella Street, Darra 1,242m2 freestander @ $112,000 pa

• 59 Moreton Street, Heathwood 1,238m2 freestander @ $30,000 pa

• 50 Cobalt Street, Carole Park 3,800m2 @ $299,000 pa

Pat Kerruish (0422 702 504)

• 218 Ewing Road, Underwood 984m2 freestander @ $236,160 pa

• 1/26-30 Access Avenue, Yatala 1,996m2 freestander @$204,000 pa

• 3/64 Meakin Road, Meadowbrook 1,179m2 unit @$123,900 pa

• 12 Production Street, Beenleigh 677m2 freestander @$100,000 pa

• 3/55 Christensen Road, Stapylton 699m2 @$80,385 pa

• 1/18 Riverland Drive, Loganholme 617m2 unit @ $72,000 pa

• 80 Moss Street,Slacks Creek 720m2 freestander @$65,000 pa net• 5/28 Nevilles Street, Underwood 535m2 unit @$61,525 pa

• 5/48 Business Street, Yatala 548m2 unit @ $60,000 pa

• 11 Timms Court, Woodridge 406m2 unit @ $34,300 pa

Sales

Rod Hewitt (0417 02 04 06)

• 57 Meadow Avenue, Coopers Plains 1,793m2 freestander @ $2,200,000

• 19 Lancashire Street, Acacia Ridge 1,334m2 freestander @ $1,350,000

• 115 Bluestone Circuit, Darra 1,556m2 freestander @ $2,549,000

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• 1937 Ipswich Road, Rocklea 13,137m2 freestander @ $12,925,000

• 9/148 Tennyson Memorial Avenue, Tennyson 289m2 unit @ $560,000

• 7/16 & 17 Mahogany Court, Acacia Ridge 210m2 unit @$402,000

• 8 Jijaws Street, Sumner 2,044m2 freestander @ $2,550,000

• 157 Cobalt Street, Carole Park 2,371m2 freestander @ $1,700,000

• 13 Counihan Street, Seventeen Mile Rocks 823m2 freestander @ $1,070,000

• 4 & 6/246 Evans Road, Salisbury 2,230m2 unit @ $1,325,000

Dom Gallagher (0411 387 146)

• 9 Formation Street, Wacol 3,135m2 freestanding investment @ $4,200,000

• 8 Jijaws Street, Sumner 2,044m2 freestanding investment @ $2,550,000

• 81Fulcrum Street, Richlands 1,440m2 freestander @ $2,050,000

• 157 Cobalt Street, Carole Park 2,371m2 freestander @ $1,700,000

• 108 Westgate Street, Wacol 1,313m2 freestanding investment @ $1,530,000

• 13 Counihan Road, Seventeen Mile Rocks 823m2 freestander @$ 1,070,000

• 3 Hasp Street, Seventeen Mile Rocks 399m2 freestander @$760,000

• 5/3471 Ipswich Road, Wacol 399m2 investment unit @ $625,000

• 8/20 Archerfield Road, Darra 194m2 investment unit @ $560,000

• 9/1147 South Pine Road, Arana Hills 244m2 unit @$470,000

Northside

Sales

James Kenny (0402 746 673)

• 26 Crockford Street, Northgate 1,272m2 freestanding investment @$2,500,000

• 17 Huntington Pl, Banyo 1,087m2 freestander @ $1,800,000

• 8/471 Lytton Road, Morningside 140m2 office unit @ $440,000

• 114 Toombul Road, Virginia 290m2 freestander @ $375,000

• 1/23 Luke Street, Hemmant 799m2 investment unit@ $1,578,000

• 73 Main Beach Road, Pinkenba 3,182m2 freestander @ $3,800,000

• 120 Old Toombul Road, Virginia 100m2 building @ $472,000

Leasing

David Knox (0408 548 281)

• 146 Crockford Street, Northgate @ $176,600 pa

• G/J 172 Robinson Road, Geebung @ $283,305 pa

• 11/368 Earnshaw Road, Banyo @ $152,000 pa

• 146 Robinson Road, Northgate @ $157,000 pa

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• 64 Buchanan Road, Banyo @ $169,300 pa

• 2/186 Granite Street, Geebung @ $146,380 pa

• 2/138 Buchanan Road, Banyo @ $133,400 pa

• 2/452 Bilsen Road, Geebung @ $69,300 pa

• 410 Bilsen Road, Geebung @ $150,000 pa

• Part 58 Crockford St, Geebung @ $80,000 pa

Sam Harper (0423 380 514)

• 690 Gympie Road, Lawnton 1,013m2 freestander @$160,054 pa

• 2/12 Johnstone Road, Brendale 380m2 unit @$38,000 pa

• 6 Unley Street, Brendale 1,300m2 freestander @$1336,500

• 5/19 Kremzow Road, Brendale 470m2 unit @ $42,300 pa

• 6/40 Terrance Road, Brendale 168m2 unit @ $14,280 pa

• 5 Unley Street, Brendale 900m2 freestander @$76,500 pa

• 35 Kremzow Road, Brendale 1,166m2 freestander @ $162,000 pa

• 28 Duntroon Street, Brendale 1,000m2 freestander @ $75,000 pa

City Fringe

Sales & leasing

Nathan Butler (0403 235 173)

• 1 & 2/28 Beesley Street, West End 490m2 unit @ $95,004 pa

• 2/134 Constance Street, Fortitude Valley 174m2 unit, @ $61,000 pa

• 13/62 Bishop Street, Kelvin Grove 382m2 unit @$60,000 pa

• 34/23 Donkin Street, West End 160m2 unit @ $58,000 pa

• 2/46 Campbell Street, Bowen Hills 200m2 office @ $46,000 pa

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• 26/43 Lang Parade, Milton 310m2 unit @$38,000 pa for 3 years

• 2/45 Crosby Road, Albion 194m2 unit @$27,180 pa

• 65 Caswell Street, East Brisbane 1,429m2 freestander @$1,320,000

• 15 Kurilpa Street, West End 506m2 freestander @ $1,123,000

• 33 Cairns Street, Kangaroo Point 208m2 freestander @$585,000

Leasing

Rob Finlay (0411 747 165)

• 11 Birubi Street, Coorparoo $46,609 net pa + GST

• 101 Annerley Road, Woolloongabba $39,360 gross pa + GST

• 50 Annerley Road, Woolloongabba $60,480 gross pa + GST

• 14/15 Donkin Street, West End $58,000 gross pa + GST

• 63 Vulture Street, West End $53,490 net pa + GST

• 16 Old Cleveland Road, Stones Corner $72,000 gross pa + GST

• 89 Main Street, Kangaroo Point $55,000 gross pa + GST

• 101 Main Street, Kangaroo Point $65,900 gross pa + GST

• 28-30 Bank Street, West End $160,000 net pa + GST

• 3/71 Birubi Street, Coorparoo $14,400 gross pa + GST

Eastside

Leasing

Rob Finlay (0411 747 165)

• 31 Export Street, Lytton $194,000 net pa + GST

• 1 Wyuna Court, Hemmant $123,900 net pa + GST

• 8/9 Archimedes Place, Murarrie $56,640 net pa + GST

• 2/57 Miller Street, Murarrie $22,000 net pa + GST

• 1/7 Miller Street, Murarrie $59,160 net pa + GST

• 1/20 Smallwood Place, Murarrie $77,768 net pa + GST

• 15/229 Junction Road, Morningside $69,000 net pa + GST

• 120 Riverside Place, Morningside $280,000 net pa + GST

• 1A/360 Lytton Road, Morningside $87,210 gross pa + GST

• 2/72 Riverside Place, Morningside $32,000 gross pa + GST

Sales

Hayden McNamara (0407 730 530)

• 11/229 Junction Rd, Morningside 295m2 unit @ $600,000

• 27 Dividend Street, Mansfield 1,120m2 freestander @$2,100,000

• 128 Gosport Street, Hemmant 1,840m2 freestander @$2,970,000

• 12 Trade Street, Lytton 1,825m2 freestander @ $2,550,000

• 30 Love Street, Bulimba 875m2 freestander @ $1,250,000

• 137 Benjamin Place, Lytton 2,190m2 freestanding investment @$3,075,000

• 62 Export Street, Lytton 13,900m2 of land @ $4,448,000

• 43 Export Street, Lytton 1,971m2 freestanding investment @ $2,625,000

• 9/333 Queensport Road, Murarrie 360m2 unit @ $979,000 n


w w w . k i n g c o . c o m . a u • 0 7 3 8 4 4 3 2 2 23 2

“In industrial we are looking at 4-5 times increase in local council infrastructure fees, and not just Brisbane, but Logan, Ipswich and others.”

In the lead up to June 2011 the State Government introduced a new charging regime for the local governments to implement. This was supposed to provide more certainty for developers and less expensive infrastructure to hopefully assist the housing and construction industries and the economy in general by generatingmoreconstruction,jobsandcheaperhousing.

Like all good state government ideas it has had the opposite effect when it comes to industrial, and other forms of development. In industrial we are looking at 4-5 times increase in local council infrastructure fees, and notjustBrisbane,butLogan,Ipswichandothers.

I believe there has been some relief for residential multi unit high rise developments and that developers can now estimate what their infrastructure fees will be with more certainty. What seems to have happened, however, is that the drafters of this legislation had no idea what the impact was for other non-residential industries due to the changes they made. And you have to pay around $450 for the privilege of knowing what the potential infrastructure fees are for an industrial block in Brisbane.

Infrastructure fees are imposed by local councils upon the development applications within their areas for both land subdivision and the construction of new buildings. These fees are set originally by the State Government and in May 2011 they introduced a new set of fees which local councils like Brisbane City Council (BCC) had to implement by the end of June. There was minimal time to undertake the changes and even the BCC town planners struggled to work out the new fees. I am told that some consultation was held with groups such as PCA, however no one seems to have understood the impact on new non-residential development.

State Government introduced Infrastructure Feeshamstringsnewindustrialprojects

The best example to explain the changes are the fees for two identical blocks of industrial land idg developed at the Metrowest Estate, 17 Mile Rocks, last year. Being one of the few companies still undertaking speculative developments we seem to have been one of the first to encounter these new fees. Earlier in 2011 we lodged a DAusingtheexcellent‘RiskSmart’systemusedbyBCCvia our town planner. The fees came back and under this system there were discounts available for some of the infrastructure charges, resulting in infrastructure fees of approximately $9,600 for a new 1,200m2 office/warehouse.

WethenlodgedaDAinJuneforouradjoiningproperty,a same sized block of land with an almost identical sized building. Prior to lodging this DA the town planner advised us that BCC had notified them that there were changesplannedunder‘RiskSmart’,whichwouldmeanthe removal of the previous discounts. A shame, but we expected that this would add $2-$3,000 to the overall fees, not that big a deal. The speed of getting the DA in and out in a couple of weeks was still well worthwhile. You can imagine our surprise, shock, horror when the fees came back at $63,000!

Naturally we assumed they had made a mistake. But no, this is the new pricing for future industrial developments of this size, and we are talking about the smallest of developments on a mere 2,300m2 of land. Take into account that this is a new industrial subdivision which the land developer has already paid infrastructure fees for the subdivision of the estate. He also paid headworks charges and connection fees for all services such as water, power, sewage etc.

We in turn have to first pay these infrastructure fees for Community Purposes, Stormwater and Transport, as well as fees for Council to design our water and sewer connections and then more fees for them to install them. Pretty sure the land developer also paid towards these when they subdivided the land as well.


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“These massive increases in most cases make new development totally uneconomical.”

As we have always understood it, prior to 30th June 2011 the fees paid by the land developer were to cover infrastructure fees for up to 50% site cover by a new building. Meaning that if we, as the purchaser of a site, built less then 50% site cover there were no infrastructure fees. We only paid fees once we went over 50%, which is normally the case. This too has been removed from the new fees.

The problem now will be one of affordability and a subsequent lack of construction due to the new pricing for infrastructure contributions. These massive increases in most cases make new development totally uneconomical. This is especially true in the case of speculative developments. There has already been examples in the Courier Mail of local footy clubs not being able to build simple change room facilities due to the tens of thousands of dollars being asked by council for infrastructure fees. The same is and will happen to industrial construction by speculative developers.

At present the industry and the developers’ margins are being squeezed on a multitude of fronts:• Highercostsforconcretebythecartelofsuppliers• Lackoffinancefrombanksformanybuyersandmost

developers containing prices and limiting sales • Valuersde-valuingvacantland,makingfinanceeven

harder and holding prices back further • Theslowermarketmeaningitoftentakesmuchlonger

to sell or find tenants for new buildings and prices have to be even more competitive

All of these points are keeping the price down on new development and squeezing already tight builders and developers’ margins more then ever before, to the point where with a 4-5 times increase in infrastructure fees, the potential small developer margin is being cut in half, making it unviable to speculatively build anything in the future.

It is not hard to envisage what will happen without speculative development in the industrial market. We

have already seen probably a 70-80% reduction in speculative development since the GFC in 2008. This has already caused shortages in work and massive job losses in the building industry. There are alsoshortages in certain categories of buildings, especially largerprojects.Thishasledtosomemajorbusinessesnot committing to new space in Brisbane and looking for alternatives down South, often with much less expensive rents than in Brisbane.

What the former State Government and present local councils did and do not seem to understand is that developers do not, and cannot absorbed these costs. They are part of the overall cost to build and subsequently are passed on to the buyers and small businesses that rent these properties. They in turn have to try and pass on their extra costs of higher rent to their customers and when they become uncompetitive, as they do, they fail. Morejoblosses,lessconstruction,lessratesbeingpaidand no new land developments.

If the object of the State Government was to providecertainty to the construction industry they have achieved it. I for one am certain that I will not be able to speculatively build new industrial properties in the current market with these costs, and idg is one of the last successful developers doing so in Brisbane.

We have had great support from our bank since we started in 2003 and even after the GFC hit it was business as usual for us, albeit on much smaller margins. Our projects worked, we could still buildcompetitively, and we create a product that works in the market. There is no room however to increase the cost of our properties to cover the enormous increase in Council infrastructure fees, and I doubt new property purchasers will be happy to pay the difference.

I strongly suggest that Council need to look at the difference between the previous charging regimes which I would have thought most councils were happy with, compared to what you are asking now. It is not sustainable and the lack of construction and new DA applications will become evident in the very near future.

Although the Queensland branch of the PCA (Property Council of Australia) were cognizant of the impact of the


new fees, and raised concerns at preliminary discussion with the government, their advice has apparently fallen on deaf ears at State Government level. As the PCA havecommentedpreviouslytheyfearseriousjoblosseswithin the construction industry in Queensland as Qld becomes even less competitive with other states, and new non residential development proposals become less economically viable due to the extreme increases in the new infrastructure caps introduced by the late Labor State Government.

The concerns raised by the PCA do not seem to have filtered down to the general development community however as few industry participants in the industrial sector seemed to be aware of the implications or indeed the scope of change that the State Government were about to impose on the Local governments of Qld. While local governments like Brisbane City Council, Logan, Ipswich and others are not forced to apply the maximum fees under the new cap, it appears that they have all donejustthat.

Having only a few weeks to implement the new regime of charges back in June/July 2011, our experience with the BCC was the people on the ground at town planning level were genuinely struggling with implementation and almost apologetic as to the level of cost they were forced to apply. The town planners at Brisbane have been very helpful in finding ways to make the pricing work for projectscaughton thecuspof thesenewchargesbuthaverecentlytoldusthatanynewprojectswillfacethefullimpactofnewfees.Thiswillmakemostprojectswehave looked at totally unviable in the current market and bring a halt to new speculative industrial development as we know it.

We’ll see what the new State Government lot has in mind. Fingers crossed. n

Garry mcnamara Director Idg Projects Pty Ltd

This Guest Commentary is to stimulate discussion and does not necessarily reflect the views of King & Co Property Consultants

Post or fax to: David Chitham, King & Co Property Consultants P.O. Box 1046 Coorparoo DC 4151 Ph: (07) 3844 3222, Fax: (07) 3844 9888 E-mail: [email protected]

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Except where otherwise noted, King’s Counsel is written, edited, and compiled by Tom Richman BA, MA, MPhil (Oxon).

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While data has been compiled from reliable sources and all care has been taken to ensure its accuracy, readers should not act solely on the basis of the information contained herein. King & Co Property Consultants recommends formal advice be sought beforehand.

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