Occupier demand rebounds

• Gross take-up in the Brisbane industrial market improved from the previous quarter, reaching 123,800 sqm in Q4 2023, close to the 10-year historical average (128,732 sqm) and 47% above the total take-up in Q3 2023.
• A single Motor Vehicle & Motor Vehicle Parts Wholesaling tenant’s prelease transaction accounted for 38% (46,953 sqm) of gross take-up in Q4 2023. PWR Advanced Cooling Technology and CEVA logistics leased and preleased 22,558 sqm and 20,350 sqm, respectively.

Delivery of new stock slows but the pipeline continues to build

• New stock delivery has considerably decreased in the quarter, in comparison to Q3 2023. Still, completion of new stock remained above the 10-year historical average (78,374 sqm), totalling 117,500 sqm in Q4 2023.
• JLL is currently tracking 896,100 sqm of stock under construction in the Brisbane industrial market, 14.5% of which has been pre-committed to. New supply over the next six months will be heavily weighted towards the southern precinct (41%).

Rents are trending up across all of Brisbane’s precincts

• All precincts saw rent increases, consolidating a strong year for rents. The southern precinct experienced the most growth in prime rents for the quarter (2.5% q-o-q), with the Trade Coast just behind it with rent growth of 2.3% q-o-q, and still recording the highest increase for the year at 21.7% y-o-y. The Northern precinct also saw growth of 1.7% q-o-q.
• Transaction volumes declined slightly in Q4 2023, totalling AUD 101.7 million. This level is well below the 10-year quarterly average of AUD 284 million. The investment market remains slow as price discovery continues. The last 12 months’ transactions (AUD 547.8 million) have further declined to stay below the yearly average of AUD 1,035.4 million.

Outlook: Industrial market to remain resilient

• Some economic stability is expected for the year ahead. Demand for Brisbane industrial stock has improved from Q3 2023 and should see further improvement in 2024. Growth will likely be driven by low vacancy and competitive occupancy costs. Nonetheless, with the rise in supply, incentives are expected to increase.
• The development pipeline is forecast to experience delays to project completions, resulting from escalating construction costs and labour shortages. For Brisbane, the supply pipeline is driven by land availability, hence the Southern precinct should experience greater activity.