Investment Demand Up in Yatala Industrial Region
Investment demand for industrial stock in the Yatala Enterprise Area (YEA) in the Brisbane-Gold Coast growth corridor has been strong during the first quarter of 2017, according to Ray White Industrial M1 North.
Ray White Industrial M1 North Team Leader Lisa Dunne said during the second half of 2016 there were few sales in the Yatala region, however, there has been a major rebound in the first three months of 2017.
“There have been sales of $16.08 million which is well ahead of the last six months of 2016,” Lisa Dunne said in the Between the Lines Yatala Industrial Overview report April 2017.
“Improvements in confidence across the Gold Coast ahead of the 2018 Commonwealth Games has done much to grow enquiry levels, though limited stock availability has seen volumes low.
“For the Yatala industrial market, larger institutional owners remain while private investors and owner occupiers have been active in the smaller industrial unit market, particularly as rental rates continued their upward momentum.
“Low interest rates and rising residential prices have encouraged diversification of funds into these higher yielding investments.
“Average capital values have increased 11.01 per cent over the last year to now range between $1,600 per sqm and $2,200 per sqm, while yields now record around 6.50 to 8.00 per cent depending on quality and lease covenant.”
Ray White Commercial Head of Research, Vanessa Rader, said there is currently 111,597 sqm of industrial supply in the development pipeline across the Yatala region through 10 projects.
“Two projects are currently under construction, the largest being the Energex Depot in Stapylton representing 14,000 sqm, this site is due for completion in mid-2017.
“There are currently seven projects with DA Approval in the Yatala region and these account for close to 90,000 sqm. Despite these projects having approval, construction is not expected to commence until adequate commitment is sourced, as such the estimated completion for these projects range between 2018 and 2020.
“Encouraging is the lack of speculative supply which has been added to the market, while vacancy levels improve they continue to be at a reasonably high rate across the broader South East Queensland industrial market. A demand led attitude towards supply completion will ensure continued growth remains in this market.”