Brisbane’s industrial vacancy rate has fallen for the fifth consecutive quarter to reach a six-year low.
Knight Frank’s latest Brisbane Industrial Vacancy update found large vacant industrial space has fallen by 7 per cent over the past quarter and by 18 per cent — or 89,154sq m — over the past year.
Prime space in greater Brisbane fell by 8 per cent to 189,365sq m, down 29 per cent over the year while secondary vacancy also dropped by 6 per cent in the quarter to 218,155sq m.
Overall there was 407,520sq m of space over 3000sq m available on April 1, the lowest figure since 2013.
However, a surge in speculative development is expected to start later this year.
Knight Frank partner and joint head of industrial Queensland Mark Clifford said the solid take up of space had supported a steady reduction in the vacancy rate, which had fallen for five consecutive quarters.
“Take up improved during the first quarter of this year, totalling 72,955sq m across 14 transactions, with another two tenancies also leased prior to becoming vacant,” he said.
“After strong leasing activity in late 2018 with larger assets, take up in the first quarter of 2019 has been dominated by smaller tenants, all of which were under 8500sq m.
“We expect to see more activity from larger tenants with requirements of 10,000sq m and above towards the back end of this calendar year.
“3PL groups are still the dominant space user at present, and this will continue for at least the balance of the year.”
The report found the Trade Coast had the highest take up of any precinct over the first quarter of 2019, with almost 26,000sq m of space absorbed and total vacancy is now 27 per cent lower than one year ago.
The industrial precinct with the least available space was the Greater North, which has just over 6000sq m after available space fell by 70 per cent — or 14,491sq m — over the first quarter.
The precinct with the most available space is the South, with just under 135,000sq m still available for lease, followed by the Trade Coast, with just over 132,000sq m.
Knight Frank partner research and consulting Queensland Jenelle Wilson said available speculative space has fallen to 49,398sq m, the lowest level in four years.
This is expected to change in the short term with commencements imminent at Jalrock Place, Carole Park (7,466sq m) and Holt St, Pinkenba (10,810sq m) and further projects to progress off the back of tenant precommitments across the south and south west.
“Speculative development starts are expected to be higher this year with major investors using speculative developments to grow their funds under management,” Ms Wilson said.
“With much of the available speculative space absorbed late last year, this will trigger a new round of construction.”
Originally published via The Courier Mail.