Brisbane Southside Blog

The Central South Industrial area is part of the largest industrial region in Brisbane and includes suburbs such as Archerfield, Acacia Ridge, Coopers Plains, Salisbury, Rocklea & Willawong. This popular area is home to some of the Largest National and International companies due to its close proximity to the CBD as well as easy access to both the Ipswich, Logan & Pacific Motorways. The 2014-2015 financial year continues saw strong signs of market improvement with records numbers of transactions as well as steady increase in enquiry levels. We are finding that both Tenants and Owner Occupiers have been leading the way with their search for larger premises or consolidation of their operation under one roof, as well increased demand for Investment properties as the Investor, both local and interstate look to capitalise on the low interest rates.

Leasing Market:
The Leasing market continues to be our strongest market making up between 60% – 70% of our monthly transactions, as tenants continue to look for a better deal away from their existing premises. We are seeing A Grade tilt panel properties lease anywhere from $95 - $115p/sqm plus Outgoings depending largely on features such as quality and location. In the B Grade buildings we are seeing steady improvements with properties leasing anywhere from $75 - $95 p/sqm depending on quality such as metal clad or bessor brick and whether or not the property was flood affected in 2011. We have also found that smaller freestanding properties under 500sqm have become a hot commodity as tenants look to steer away from unit complexes.

Sales Market:
Sales activity in the area has been strengthening with Owner Occupiers looking to capitalise on the lower asking prices at such a low interest rates.  We are seeing A grade stock selling in the range of $1,300p/sqm - $1,600p/sqm, with the B Grade stock the rates are slightly lower but is largely dependent on the features and benefits it may offer. A large drive in the Owner Occupier market has been from businesses who currently tenant properties who are now looking at the alternative of purchasing with the plan to have their business lease the property back from a related entity, therefore reducing their costs.

We have also seen a strong rise in the number of investors looking to buy properties under $2 million, largely driven by the Self Managed Super Fund (SMSF) buyer. The huge demand for an investment with a strong tenant leased for a minimum of 3 years delivering an 8% return has become hard to find, which has lead to an increase in investors purchasing vacant properties and then leasing them out. Raine & Horne Commercial has been involved in numerous deals of this nature, which requires investors to purchase cheap and rent at below market rates in order to secure a tenant quickly. We have also been finding that due to this lack of investment stock, investors are purchasing properties with only 1 – 2 Year Leases at 6.5% - 7.25% Returns depending on the quality of building and tenants to satisfy their purchasing requirement.

The Central South area still remains a sought after area for many industries such as; Transport & Distribution to Importing, with many different properties on the market to suit various needs.

Want to know where your property sits in the current market?  Give us a call!

Michael Cars   0423 188 698
Wayne Newberry   0408 723 023