Australia’s industrial and logistics sector is experiencing a significant surge in demand, leading to concerns about the adequacy of land supply to meet future needs. Recent analyses indicate that the country may face a shortfall in industrial land within the next five years, with Queensland being a focal point of this issue.
Land Supply Challenges
In Brisbane, the third-largest industrial market in Australia, there is approximately 6,490 hectares of zoned industrial land. However, only 11% (around 738 hectares) of this is undeveloped and serviced. Land absorption reached a record high in 2022, totalling 170 hectares, compared to the five-year annual average of 119 hectares. This rapid uptake reflects strong occupier demand, particularly from sectors such as retail trade. Source
The Gold Coast is also experiencing a severe shortage of fully serviced industrial land, which has fallen to an all-time low in 2023. This scarcity has driven property prices to new heights amid sustained demand. The Yatala Enterprise Area, for instance, has less than seven months of supply remaining, given the average monthly take-up since early 2021. Source
Looking ahead, projections suggest that by 2029, demand for industrial space in Australia will outstrip supply, necessitating the expansion of the industrial and logistics market by 20% by 2030. This anticipated shortfall underscores the need for strategic planning and investment to ensure that industrial land supply can accommodate future economic growth and infrastructural development. Source
Queensland’s industrial land market is under significant pressure due to escalating demand and limited supply. Addressing this challenge will require coordinated efforts from government bodies, industry stakeholders, and investors to expand and develop industrial land resources effectively.
Key Factors Driving Demand in Brisbane
- Population Growth: Brisbane’s growing population is driving demand for logistics and industrial facilities to support the city’s expanding consumer base.
- E-Commerce Expansion: The rapid rise of e-commerce is fuelling demand for distribution centres and last-mile delivery facilities.
- Strategic Location: Brisbane’s role as a key logistics hub for Queensland and northern Australia makes it a critical market for industrial development.
- Tenant Preferences: Occupiers are prioritising locations close to end users and infrastructure that supports operational efficiency and environmental sustainability.
What Does It Mean If You Are the Landlord?
- Increased Property Value: As industrial land becomes scarce, demand for existing industrial properties will likely increase, driving up property values. This can be beneficial for landlords looking to sell or lease their properties.
- Higher Rental Yields: Limited availability of industrial spaces could push rents higher, allowing landlords to charge premium prices, especially for properties in key areas like Sydney, Melbourne, and Brisbane.
- Redevelopment Opportunities: With a shortage of developable parcels, landlords may find opportunities to redevelop existing properties, such as converting underused land into high-demand facilities like multi-storey warehouses.
- Tenant Competition: Landlords might see more competition among tenants, particularly from sectors like e-commerce and data centres, which drive much of the demand.
- Long-Term Planning: Landlords must consider the long-term impact of population growth and changing market trends, such as demand for ESG-compliant properties and proximity to key infrastructure.
Unsure What to Do? As a Landlord, You Are Missing Out
- Missed Financial Gains: Failing to lease or sell industrial land in a high-demand market means missing out on potentially significant returns.
- Decreased Asset Value: As land in prime locations becomes increasingly scarce, properties left idle may lose value relative to active, optimised properties.
- Opportunity Costs: Delaying decisions about redevelopment or leasing may result in losing out to competitors who are better positioned to meet tenant demand.
- Changing Market Dynamics: Over time, tenant preferences and market conditions may shift, leaving unprepared landlords at a disadvantage.
How McGees Property Brisbane Can Help
Navigating Brisbane’s industrial land market requires expert guidance. If you are a landlord with industrial land in Brisbane that you are considering leasing or selling, McGees Property Brisbane is here to assist.
Our team has the expertise to help you maximise the potential of your property and take advantage of the opportunities presented by the current market conditions.
Call 07 3231 9777 today to learn how we can help you achieve your property goals in Brisbane’s dynamic industrial land market.
For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane
Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.
Liability Limited by a Scheme approved under Professional Standards Legislation
