Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe>

"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe>

The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 percent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

[smartcode_project:default project_id=4661 project_image_fid=314259]

Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

[smartcode_project:default project_id=5743 project_image_fid=925]

Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

Industrial Market

<html><body>
There have been no major shifts in Australia's industrial property markets in the past month, according to valuation firm Herron Todd White's latest industrial property clock.
Four of the eight capital cities hold a positive position in their industrial property market.
Melbourne is the strongest as it holds the peak of market position, it is joined by Coffs Harbour.
Meanwhile, industrial space in Sydney and the Sunshine Coast is approaching peak of market.
Brisbane and Hobart are classed as rising markets.
Click <a href="https://www.propertyobserver.com.au/images/2019/7/22/HTW%20INDUSTRIAL%20PROPERTY%20CLOCK%20JULY.png" target="_blank">here</a> to enlarge.
<a href="https://www.propertyobserver.com.au/images/2019/7/22/HTW%20INDUSTRIAL%20PROPERTY%20CLOCK%20JULY.png" target="_blank"><img src="https://www.urban.com.au/images/2019/7/22/HTW%20INDUSTRIAL%20PROPERTY%20CLOCK%20JULY.png" alt=""></a>
Adelaide, Perth, Canberra and Darwin were not given a position on the HTW Industrial Property Clock this month.
Cairns, Gladstone, Ipswich, Rockhampton, Toowoomba and Townsville all remain at the bottom of the market.
The central Coast and Newcastle industrial property markets are both still in the starting to decline position, according to HTW.
Other areas that are approaching the peak of market include Lismore, the Southern Highlands and the Souther Tablelands.
Echuca, Illawarra, Mildura and Geelong are classified as rising markets while Horsham and Mackay are still in the start of a recovery.
</body></html>

j.ballantyne1990-6AQqhLzZaK

No movement across Australia's industrial market in June: HTW Industrial Clock

<html><body>
The national industrial market is arguably the best performing property sector currently with land values up a massive 21.6 per cent, prime net face rents up 3.8 per cent, and vacancy averaging a low 2.6 per cent, according to independent valuer and advisor m3property’s latest national industrial report.  
The Australian Industrial: Winter 2019 report found prime yields were at a record lows in the June quarter 2019, ranging from 4.5% to 8.75% nationally for prime stock and 5.5% to 10% for secondary stock, with sales activity over 2018 the strongest recorded since the mid-2000’s. 
However, the report also notes a significant slowdown in online retail trade growth, according to figures reported in the NAB Online Retail Sales Index. This may see some contraction in tenant demand for the logistics sector - the most important market driver.
Vacancy also rose over the first quarter of 2019 suggesting net demand is no longer increasing faster than net supply. 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/16/12%20month%20outlook%20.jpg" alt="">
National Director Research, Jennifer Williams, said the industrial market was undoubtedly enjoying its best period in years. Rents, which were previously stubbornly stagnant for a decade, are finally showing some real growth and land prices reflecting the enormous increase in demand for new stock on the back of the e-commerce revolution. 
“Australia’s industrial market is in the upturn phase of the current cycle and, while some states are further advanced in the cycle than others, it is generally a time when landlords should be locking in longer-term deals. 
“Sydney is experiencing boom-like conditions, Melbourne is experiencing significant land value increases and the Brisbane market is also seeing rental growth, land rates rising strongly and yields continuing to tighten,’’ Ms Williams said. 
She said, while slightly less advanced in the upturn, Adelaide was also experiencing solid demand and rental growth on the back of an impressive list of projects, while in the Perth market, prime space in the best locations was performing well, but secondary stock was languishing. 
The report found Sydney rental growth over the year to June 2019 was almost triple the long-term (25-year) annual average and land value growth was over four times the 13-year annual average, while in Melbourne tenant preference for new stock over existing space was driving significant land value increases, but at the same time constraining rental growth.
“Overall, the industrial market is travelling very well with economic stimuli including tax cuts, lower mortgage rates and easier access to loans, likely to drive economic activity and keep the industrial markets in the upturn phase of the cycle over the short-term. 
“However, the risks are growing. Prime well-located space should continue to out-perform and see further rental growth over 2019 but the secondary market is likely to have peaked in many markets and is starting to push up vacancy nationally. 
“The dip in online sales growth since late in 2018 is also a warning to investors but, more importantly, to speculative developers who need to be aware of the risk of an overblown response to the e-commerce led demand for new distribution stock. Already we are seeing a slight rise in vacancy for quality, well managed, industrial space,’’ Ms Williams said. 
January to September 2018 was one of the strongest growth periods in the history of the NAB online retail sales index (NAB 2019) with growth averaging over 1.6 per cent per month, but since then activity has slowed to an average below 0.5 per cent per month on reported numbers. (NAB, Online Retail Index reports 2018-2019).
<a href="https://www.propertyobserver.com.au/images/2019/7/16/m3property.jpg" target="_blank">Click here</a> to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/16/m3property.jpg" alt="">
National Director Industrial, James Farrugia, said he expected strong investment demand to continue for at least the remainder of 2019 as the existing acquisitive players in the market continued to reweight their portfolios from other asset classes into industrial, particularly logistics, assets. 
He said low interest rates and the search for yield in an asset class that has traditionally offered attractive yields, had combined with the e-commerce revolution, a downturn in the apartment market and a troubled retail market, to produce the best industrial investment market in decades. 
“Yields may tighten further, but less than the last 12 months and certainly for super prime/prime assets which have already attracted the tightest yields and are now testing a growing number of purchaser’s return on investment tolerances when assets are bought to the market and these purchasers advance through the various rounds of negotiations. 
“Secondary investments may offer more scope for tightening, however the yield gap between prime and secondary assets has already contracted considerably in the last 12 months,’’ Mr Farrugia said.  
He said any further secondary investment yield contraction would need to be supported by strong fundamentals including a location within a tight market, good prospects for underlying land and rental growth, or a strong lease covenant which would carry the asset through to a timely redevelopment or repositioning. 
Mr Farrugia said limited development/investment options in Sydney, together with steady demand for modern logistics space and ongoing interest from domestic and international purchasers, would drive increased activity across the Melbourne and Brisbane markets, particularly for land acquisitions. 
“That activity is going to put further downward pressure on yields for prime properties in the best locations and drive further speculative construction across all eastern seaboard markets,’’ Mr Farrugia said. 
<a href="https://www.propertyobserver.com.au/images/2019/7/16/m3property.jpg" target="_blank">Click here</a> to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/16/m3property.jpg" alt=""> 
</body></html>

Industrial market booming but online slowdown a risk factor: m3property

<html><body>
Institutional investors are chasing logistic and warehouse opportunities in Brisbane with the sector recording an estimate of $230 million in sales in Q1 this year (for properties above $5 million). Portfolio sales that were an equity buyout made up an estimated $106 million of this total.  
Rise of e-commerce, logistics and warehousing activity are influencing investors to increase their exposure in the industrial markets across Australia. 
“Investment into the industrial sector has started off strongly this year, with indicative figures showing an increase of 135 per cent on Q1 last year, when sales totalled $98 million, and $27 million was attributed to portfolio sales,” said Simon Beirne, Queensland Chief Executive at Colliers International.  
“Institutional investors are dominating, making up about 74 per cent of the sales, with most of the activity occurring in the greater Brisbane south and south west regions.  
“Strong investor demand and limited available assets have led to further increase in prices and tightening yields across the board, with average prime grade yields sharpening for eight consecutive years and average secondary grade yields tightening for a sixth consecutive year,” said Mr Beirne. 
The highest settled industrial sale in Queensland so far this year was a portfolio of two significant industrial assets in Acacia Ridge which were sold to a Sydney based private investor for $42.08m. 
The subject properties are 134-160 Ingram Road and 220-240 Bradman Street and span a total of 10.3ha of general industry land.
They are occupied by Austube Mills Pty Ltd and Onesteel Reinforcing Pty Ltd on long term leases. Both companies were acquired by GFG Alliance, an international group of businesses, founded and owned by the British Gupta Family. 
The offering was sold via an Expression of Interest campaign marketed by Simon Beirne and Matthew Frazer-Ryan from Colliers International and Tony Iuliano and Gary Hyland from JLL, on behalf of KordaMentha. 
As per the latest research from the Industrial Research and Forecast Report, prime grade yields have tightened in the range of 25bp to 50bp for the past 12 months, to an average of 6.07 per cent as at March 2019.
Lower yields have driven an annual average increase in capital values of 9 per cent to $1,799 per sqm as at March 2019. 
In the secondary market, average yields have compressed 47bp for the YoY to March 2019, to 7.65 per cent. Consequently, annual average capital values for secondary assets have increased by 2.7 per cent, to $1,073 per sqm.
The extent of the capital value increase for secondary assets was limited by a modest fall in rents recorded in the North and South West precincts.
</body></html>

Institutional investors dominate Brisbane’s industrial market

<html><body>
New tenants are signing up in Sydney’s Moorebank industrial precinct.
More than 135,000 square metres of space in the precinct has been taken up over the past 12 months, CBRE said.
The group said its industrial and logistics team had represented Goodman, an industrial property developer, in leasing approximately 90,000 square metres in the area.
Briggs &amp; Stratton, an American manufacturing group, signed a five-year lease on a brand-new facility spanning 14,500 square metres at the Oakdale South Industrial Estate.  
Aidacare and Permaform have both relocated from other spaces to the former Briggs &amp; Stratton facility on initial five-year terms, with a NLA of 11,443 square metres.  
Rentals in the Moorebank industrial precinct range from approximately $115 - $130 per square metre per annum, CBRE advised.
The recent uplift in tenant activity in Moorebank was being driven by large scale vacancy becoming available in 2018, CBRE’s Tom Rourke said.
“With the IMEX intermodal set to be operational by the second quarter of this year – creating a direct connection and between Port Botany and MLP via a dedicated freight line – many logistics companies are seeing MLP as a gamechanger in the market,” Rourke said.  
“MLP provides a considerable cost advantage over some other industrial precincts such as Botany and Matraville.
“Furthermore, there is also potential for Moorebank to evolve into a last mile location given the reduced truck congestion on the M5 and completion of WestConnex, which will reduce metro delivery times to bring MLP more in line with more established last mile locations such as Homebush and Chullora.”
</body></html>

Sydney’s Moorebank industrial market attracting new tenants

<html><body><div class="page" title="Page 2">
<div class="section">
<div class="layoutArea">
<div class="column">
EXPERT OBSERVER
We expect industrial assets to outperform Australia's (Aaa stable) broader commercial property market over the next several years. This expectation, in large part, reflects our view that the sector will benefit from a combination of accelerated growth in e-commerce activity and technological innovation that create a wider range of applications for industrial assets, making them more resilient than in previous property cycles. State governments' large infrastructure spending will also improve connectivity and drive valuation growth.
We believe that these trends most benefit A-REITs with large, diversified, well-located industrial portfolios, particularly with large exposure to the tightly held Sydney market, including Goodman Group (Baa1 stable) and its largest fund Goodman Australia Industrial Partnership (GAIP, Baa1 stable) and Charter Hall Group's (Baa1 stable) Charter Hall Prime Industrial Fund (CPIF, Baa1 stable). We also expect that diversified A-REITs, such as Mirvac Group (A3 stable), Stockland Group (A3 stable), Dexus (A3 stable), and GPT Group (A2 stable), will continue to increase their industrial exposure to take advantage of these trends.
Demand for industrial assets will continue to grow
. This is driven by a combination of factors, mainly: (1) the growth in e-commerce and related industries as a result of the increasing popularity of online shopping; (2) technological advances that offer supply-chain efficiencies and create demand for industrial space outside traditional warehousing/storage; (3) large investment programs in public infrastructure that improve transport efficiency and connectivity; and (4) the strong underlying fundamentals of the Australian economy with 26 years of uninterrupted economic growth, rising private consumption and solid labor market fundamentals.
<a href="https://www.propertyobserver.com.au/images/2019/2/21/INDUSTRIAL%201.jpg" target="_blank">Click here</a> to enlarge:
<div class="page" title="Page 2">
<div class="section">
<div class="layoutArea">
<div class="column">
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/21/INDUSTRIAL%201.jpg" alt="">
Total current demand for industrial space exceeds both the supply and long-term demand averages. Major metropolitan areas continue to suffer from a shortage of available industrial zoned land, especially in densely populated areas and around key transport nodes. Industrial transaction volumes continued to trend lower in fiscal year 2018, ended 30 June 2018, (Exhibit 2), reflecting the diminishing availability of quality industrial assets as well as a limited land-supply pipeline. The shortage has been further exacerbated by the active rezoning of industrial land towards alternative uses, particularly residential.
The high demand for industrial assets has benefited A-REITs with industrial exposure as land values appreciated across major metropolitan areas. Sydney values increased by around 50% over the last three years, followed by Melbourne and Brisbane at around 35% and 25%, respectively (Exhibit 3). Higher land prices have put downward pressure on A-REIT cap rates (Exhibit 2). We expect cap rates will likely compress further over the next 6-12 months, as rising rents support asset values.
<a href="https://www.propertyobserver.com.au/images/2019/2/21/exhibit%202.jpg" target="_blank">Click here</a> to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/21/exhibit%202.jpg" alt="">
 
<a href="https://www.propertyobserver.com.au/images/2019/2/21/exhibit%203.jpg" target="_blank">Click here</a> to enlarge:
 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/21/exhibit%203.jpg" alt="">
<div class="page" title="Page 3">
<div class="section">
<div class="layoutArea">
<div class="column">
Occupancy levels continued to rise for rated A-REITs as tenants rushed to secure lease space before rents increase materially. Occupancy levels were at around 98% for the 12 months ended 30 June 2018 - an all-time high for the industrial sector. We expect occupancy levels to remain at around 97%-98% over the next 12-18 months.
We believe the elevated demand for industrial assets will continue over the next 2-3 years with land prices and rents to rise faster in locations where there is higher population density and higher competition for alternative uses. We expect A-REITs with exposure to the Eastern Seaboard assets, where around 80% of Australia's population is located, to outperform others. This includes companies such as GAIP (100% portfolio), Mirvac (100%), Dexus (99%), Stockland (94%) and CPIF (86%).
Of this group, A-REITs with overweight exposure to Sydney, such as GAIP (84% portfolio), Mirvac (100%) and Stockland (69%), are best positioned to derive above-average levels of rental growth due to the city's superior economic fundamentals, higher take-up levels, and lack of available high quality industrial land relative to other major metropolitan areas. We consider South Sydney to be the most resilient among sub-markets, as the region is supported by major strategic transport gateways (Sydney Airport Finance Company Pty Ltd (Baa1 stable) and Port Botany) and the close proximity to Sydney's wealthy inner-metro region.
At the same time, as major ports on the Eastern Seaboard (Port of Melbourne, Lonsdale Finance Pty Limited, Baa2 stable), Port Botany, Port of Brisbane continue to expand due to the pick-up in the freight activity, we expect higher demand for industrial assets located close to these infrastructure assets.
As large blocks of land become harder to secure in the Sydney area, failing to accommodate the full footprint of international players, we expect tenants to increasingly look for comparable and cheaper options in Melbourne and Brisbane, servicing Sydney out of these cities.
Population growth and solid economic fundamentals will support an acceleration in demand growth for industrial assets over the next several years. Meanwhile, increasing diversification of industrial asset usage and tenants, reflecting e-commerce penetration and technology advancements, will drive underlying demand.
Increased e-commerce activity will remain a major driver of demand for industrial property -- and will reshape the portfolios of A-REITs We consider the growth in e-commerce as one of the major drivers of the significant level of investor demand for industrial assets in Australia, particularly as industries associated with residential construction enter a slowdown. We expect the growth in online shopping to accelerate over the next 2-3 years, which should have a positive spillover effect on demand for industrial space.
We see large untapped potential for the e-commerce sector as the penetration rate in Australia lags those of other developed nations like the US and UK (Exhibit 4). Online as a percentage of total sales in Australia was around 9% in 2018, which lags the US by around four years and the UK by seven years. The US and UK penetration rates are now around 13% and 17%, respectively.
<div class="page" title="Page 4">
<div class="section">
<div class="layoutArea">
<div class="column">
The growth of online retail in Canada also provides evidence for increasing online penetration in Australia. Both Australia and Canada have similar logistical challenges of servicing densely populated urban areas with large distances between cities. Canada's e-commerce sales as a percentage of total sales was much less than Australia's in 2012, however, it has caught up with Australia since then.
<a href="https://www.propertyobserver.com.au/images/2019/2/21/exhibit%204.jpg" target="_blank">Click here </a>to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/21/exhibit%204.jpg" alt="">
<div class="page" title="Page 4">
<div class="section">
<div class="layoutArea">
<div class="column">
Demand for space will be driven by the expanding needs of online players such as Amazon.com, Inc. (A3 positive) and Alibaba Group Holding Limited (A1 Stable). A-REIT issuer feedback suggests that e-commerce retailers usually require more space than traditional retailers as they need to stock a greater range of readily available products. Further, we expect supporting industries such as transportation, warehousing, logistics, postal and third-party logistics (3PL) to expand to address the growth in e-commerce.
As consumers continue shifting their purchases online and demand faster delivery at minimized costs, we expect to see an increase in demand for smaller fulfillment centres that are located closer to end-consumers. These centres are used for last-mile delivery and are supported by larger distribution centres located in outer locations. We also believe that increasing land scarcity and surging land prices in densely populated urban areas will increase the usage of multi-storey warehouses, helping to ease the pressure of delivering items to consumers as quickly as possible. Therefore, we expect assets in densely populated areas or with proximity or access to key transport nodes to continue to rise in value.
Demand will also come from brick-and-mortar retailers that will require new distribution space and capabilities as they continue to invest in digital and expand their online offerings. At the same time, as store sales growth lags online growth, we expect physical retailers to continue rationalizing their existing retail footprints, putting pressure on the retail assets of A-REITs.
To capitalise on strong demand, diversified landlords with industrial exposure will likely leverage off their relationships with retail tenants to accommodate the tenants' needs in industrial space. We expect companies like Charter Hall, Stockland, Mirvac, and GPT to benefit the most due to their large exposure to big retail groups like Wesfarmers Limited (A3 stable), Coles Group Limited (Baa1 stable) and Woolworths Group Limited (Baa2 stable).
The growth in e-commerce will most benefit large pure-play industrial A-REITs such as GAIP and CPIF and those diversified players with large industrial exposures such as Stockland and Dexus. Further, we expect other A-REITs to rebalance their portfolios towards the industrial sector over the next 2-3 years, by shifting away from retail as negative sentiment impacts this property segment. We have already seen A-REITs announcing this shift in focus, with Mirvac, Stockland and GPT planning to increase the allocation to the sector. Dexus is partnering with Singaporean sovereign wealth fund GIC to create an AUD2 billion unlisted logistics property trust, seeded with assets from Dexus' portfolio with an active development and acquisition mandate.
Technology and innovation will continue to create additional opportunities for landlords and tenants
We believe that advances in technology are creating additional opportunities for both tenants as well as industrial landlords. Tenants will benefit from utilizing technology, such as big data, cloud software, machine learning, predictive analytics, artificial intelligence, drones, robotics, and autonomous driving, to optimize their operations and create more efficient distribution networks.
<div class="page" title="Page 5">
<div class="layoutArea">
<div class="column">
At the same time, technological advancements provide a range of benefits for the industrial A-REITs. Increasingly sophisticated industrial assets can accommodate a wider range of uses, such as e-commerce, data centres, high-tech logistics, health care, “dark stores”,1 etc. Increasing applications of industrial space will improve demand beyond the historical tenant base and provide greater tenant sector diversity, reducing the risk of a correlated downturn among A-REITs' customer base, increasing the pool of potential future tenants to fill vacant space.
This also means the sector is less reliant on traditional “blue-collar” manufacturing industries that face structural decline in Australia, primarily due to high domestic labor costs. We view this diversification as a significant credit positive for industrial A-REITs, providing resilience to the cash flows and earnings through the property cycle.
Large investments in technology by tenants mean longer payback periods for these investments. We view this as positive for landlords as this will make moving facilities less attractive and will translate into longer weighted average lease expiry (WALE) through longer new leases, better retention and reduced vacancy risk. For example, some of the largest Australian retailers like Woolworths and Coles have signed 20-year leases for their respective distribution centres, putting extensive amounts of capital in internal fitouts and automation systems.
This trend for longer leases might moderate the recent declines in WALE across rated REITs, which, in part, was caused by the large amount of leases signed by 3PL companies that sign leases with an average duration of 3-5 years.
We expect A-REITs to also benefit from technological advancements in building and construction as properties now can be constructed more quickly and cheaply, offsetting the rising costs of land. Moreover, the increased application of green technologies such as solar panels should provide A-REITs with an additional source of income from selling energy to the tenants as well as lower their own cost base in an environment of rising energy expenses.
Solid economic conditions and large infrastructure investment on the Eastern Seaboard will support the long-term demand for logistics We expect Australian economic growth, increased trade flows in Asia and large public infrastructure investment on the Eastern Seaboard to support long-term demand for logistics.
Robust economic conditions in Australia with over 26 years of uninterrupted growth will continue to be underpinned by (1) the current outlook for global economy, and particularly Asia, where a lot of Australia's key trade partners are located; (2) solid labor market and wage growth stabilizing; (3) relatively low Australian dollar boosting net exports, and; (4) strong rates of population growth.
Increased trade flows are expected to have a positive impact on industrial property demand, especially for assets that are located close to key infrastructure such as ports, motorways, airports and intermodal terminals.
Public infrastructure spending is expected to accelerate over the next 2-3 years with the value of announced projects at a record high (Exhibit 5). The state governments of New South Wales (Aaa stable), Queensland (Aa1 stable) and Victoria (Aaa stable) plan to increase their respective infrastructure spending programs the most, although we believe the major benefits of this spending for industrial assets will be in the longer term. This will be further supported by the Australian Government's (Aaa stable) commitment to spend more than AUD75 billion over the next 10 years on transport infrastructure across Australia under the National Infrastructure Plan.
<a href="https://www.propertyobserver.com.au/images/2019/2/21/exhibit%205.jpg" target="_blank">Click here</a> to enlarge: 
<div class="page" title="Page 6">
<div class="section">
<div class="layoutArea">
<div class="column">
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/21/exhibit%205.jpg" alt="">
 
<a href="https://www.propertyobserver.com.au/images/2019/2/21/exhibit%206.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/21/exhibit%206.jpg" alt="">
We expect A-REITs which focus on NSW and particularly Western Sydney to benefit the most as this is where the largest investments will be made over the forecast period. Spending includes large projects, such as the Western Sydney Airport project (set to open 2026) and Western Sydney Rail. Melbourne will also see some benefits from projects like Fisherman's Bend urban renewal project.
Overall, we think that infrastructure improvements will benefit both the tenants, through improved transport efficiency, connectivity and productivity, as well as the industrial A-REITs that will see valuation uplift for properties located next to the upgraded networks. Further, industrial landlords will see continued demand from industries that are supporting these infrastructure projects.
Moody's provides credit ratings, research, tools and in-depth analysis on the widest possible range of debt market topics.
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div></body></html>

Demand for Australian industrial assets growth to be driven by e-commerce and technological innovation

<html><body>
Major project completions in Queensland’s mining sector have helped stimulate economic progression, with growth in state final demand for the 12-month period rebounding above long-term averages, according to Savills Australia.
The company’s latest industrial report for Brisbane reveals that ongoing mining projects in Queensland are likely to see continued positive effects on the state’s economy, which coupled with the forecasted $46 billion in infrastructure projects that are in the pipeline, will drive further demand for industrial space in Brisbane.
Associate Director for <a href="http://www.savills.com.au/research/australian-research.aspx" target="_blank">Capital Strategy &amp; Research</a>, Shrabastee Mallik, noted that a positive spill-over effect into Brisbane’s industrial markets was imminent and would aid ongoing leasing demand and generate an increasingly positive business sentiment for the industrial sector.
“While the e-commerce sector in Australia is still in its infancy stages, there is growing evidence that Australians’ appetite for online retailing is rapidly increasing,” she said.
“Although Amazon’s entrance into the Australian market was underwhelming, the company has been increasing its footprint across the nation, as it sees the growth potential in the online retail space.”
Callum Stenson, State Director for <a href="http://www.savills.com.au/services-and-sectors/industrial.aspx" target="_blank">Industrial &amp; Business Services</a> in Queensland said that he had observed an increase in investor enquiries about industrial warehouses for transport and logistics in response to growing recognition of Australia’s online retail market. 
“While sales activity in the current financial year was notably less than the records set in FY-16 and FY-17, we are going to see a comeback over the remainder of 2018, particularly from domestic investors who see the diversification benefits in investing across grades and precincts,” he said.
“There was a notable drop in offshore investors purchasing industrial assets as a lack of large prime-quality offerings were available for sale.”
Mr Stenson noted that when looking at leasing activity, the 12 months to June 2018 saw tenants from the Transport &amp; Logistics sector dominate overall leasing activity and account for more than half of the total space leased in Brisbane’s industrial market.
There is a growing demand for industrial facilities to become more integrated business facilities supporting multiple types of transportation, especially as Australia’s international trade continues to increase at a rapid rate. 
Growth projections made by HSBC Trade Connections forecasts Australia’s trade to grow nearly 130% by 2025, almost double the global rate.
Fringe areas which extend as far as the Gold Coast have also recorded notable increases and confidence.
Logistics giant Toll Group has signed a pre-commitment for a purpose built facility on the Gold Coast site formally known as home to multinational Colgate-Palmolive.
Renamed Gold Coast Logistics Hub, the 22ha Arundel site was purchased last year by the Asia Pacific logistics property specialist, LOGOS Property and Global Fund Manager Partners Group for more than $20 million.
Toll has committed to an initial 12-year lease across a 10,250sq m logistics facility, with Savills recording it as one of the largest industrial deals done on the Coast in recent times.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/9/5/southport1.jpg" alt="">  Artist Impression of Gold Coast Logistics Hub.
Mr Stenson said that the commitment enabled Toll to consolidate several existing facilities and bring their operations together in under one roof.
The masterplanned layout for the Hub provides flexible design and construct solutions from 3,000sq m to 30,000sq m. 
”The Hub will provide local occupiers with quality opportunities, representing the last scalable infill site in the central Gold Coast region,” Mr Stenson said.
Brisbane’s Southside and Trade Coast precincts recorded the largest falls in market yields in the year to June 2018.
Looking forward, Ms Mallik said that infrastructure projects were providing the impetus for developers and institutional land owners to bring speculative development back to the forefront, recognising the recent lift in leasing demand, particularly in well-located locations close to major arterial roads. 
“While both leasing and sales activity were down in the most recent financial year compared to the previous year, it is expected that 2018 will continue the trend of strengthening tenant and buyer demand, as indicated by industrial job advertisement growth in Queensland, which is now the third highest nationally,” she said. 
Savills is a leading global real estate service provider offering the full spectrum of services from strategic advice to managing assets and projects and transacting deals. Callum Stenson is Savills QLD State Director for <a href="http://www.savills.com.au/services-and-sectors/industrial.aspx" target="_blank">Industrial &amp; Business Services</a>. Shrabastee Mallik is Savills Associate Director for <a href="http://www.savills.com.au/research/australian-research.aspx" target="_blank">Capital Strategy &amp; Research</a>. To learn more about Savills, visit <a href="http://www.savills.com.au/" target="_blank">savills.com.au</a>.
</body></html>

jrobinson-rf4aSBido9

Brisbane industrial hits investor lists following QLD's economic turnaround: Savills

<html><body>
New vertical lift technology is enabling building up rather than out meaning that Sydney's record industrial site prices can be managed more cost effectively. 
Heightened industrial warehousing demand in the past 24 months has driven land values across Sydney to record high levels, according to new research from Savills Australia.
Industrial land values in South Sydney are now at their highest level on record, pushing the $2,000 per square metre mark, while industrial sites in Western Sydney are at more than $600 per square metre.
Sydney’s population increased by 100,000 people in the past year, with 85% made up of overseas migrants. 
Savills Australia’s associate director for capital strategy, Shrabastee Mallik says that the "record high levels of population growth are eating up available land for residential purposes with blocks of land within traditional industrial precincts being sold for residential redevelopment purposes".
"Manufacturing and logistics sector accounts for 10% of NSW’s Gross State Product and projections point to significant growth over the next 30 years,” she said.
“As such, stellar growth in land values in the South Sydney precinct is understandable, which include Port Botany and Port Kembla, with these jointly contributing $4 billion dollars to the state economy". 
She also pointed out “NSW Ports’ 30 Year Master Plan points to these two ports tripling the amount of container volumes processed over the next 30 years”.
New innovations in the form of vertical lift technology enables massive increases in efficiency by building up rather than building out utilising lifts reaching almost 10 metres, which has the effect of reducing warehouse size from 200 square metre to just 14 square metre. These types of technologies have the added advantage of requiring fewer workers, reducing operating costs.
Already, most new warehouse and supply chain environments are making use of such innovations, and the development of Moorebank Logistics Park, in its use of robotics and purpose-built facilities, has attracted significant interest across the warehousing and logistics sectors with Target Australia signing on as the first tenant at Moorebank, with a 10-year lease (plus options) for a new 37,860 square metre warehouse, due for completion in 2019.
</body></html>

Shrinking Sydney drives changes in industrial warehousing developments

<html><body>
The Melbourne industrial market performed strongly in 2017, according to the recent report by valuers, Herron Todd White (HTW).
With interest rates remaining low and a relatively stable economy, new industrial developments are continuing to come onto the market, it noted.
"This can be seen in growth corridor areas where there is an abundance of vacant land prime for development, including suburbs such as Clyde and Pakenham in the south-east, Carrum Downs in the south, Truganina and Derrimut in the west and Epping in the north," the report said. 
"The need for small scale industrial units continues to grow, especially for tradies and retirees looking for extra space solutions to store their associated tools or lifestyle equipment."
HTW expect to see increased demand for large scale warehousing and distribution facilities, particularly in the western suburbs where the proximity to the western suburbs to the West Gate Freeway, Princes Freeway and Western Ring Road is a major draw card for transport, logistics and distribution.
It noted there have been a number of new major projects throughout Melbourne, including the Woolworths Distribution Centre in Dandenong South, the Merrifield Business Park in Mickleham and the Bund Business Park in Port Melbourne, which are all due for completion in 2018.
Throughout 2017 there was extensive investment in infrastructure with major road widening projects for the City Link Tullamarine Freeway, Western Distributor Project and the Monash Freeway. Industrial areas in the vicinity of these transportation routes are anticipated to have continued demand.
Rental levels are expected to remain reasonably stable for the first quarter of 2018. Prime face rental rates in Melbourne’s industrial outer areas have generally ranged between $70 and $90 per square metre of building area per annum net plus GST, with secondary rates around $50 to $70 per square metre of building area per annum net plus GST.
Tenant demand has remained relatively strong over the previous 12 months however we remain cautious of oversupply given the large amount of industrial development occurring, especially in the south, south-east and west.
Incentives are expected to remain reasonably high with larger scale new developments achieving a range of 15% to 35%, HTW noted.
Yields have been under increasing downward pressure for prime grade industrial development with yields for secondary development generally steady.
"This has been underpinned by the current low interest rate environment and investors hunting quality investments and there being limited properties for sale," the March report noted.
Vacancy rates are continuing to decrease in comparison with 2016 as tenant demand is increasing to match the supply on offer.
Demand has remained consistent this year in the northern suburb of Epping following the relocation of Melbourne’s fruit and vegetable market to Cooper Street in late 2015. This area has seen an influx of speculative development for both standard of office and warehouse accommodation and cold storage facilities.
Areas to avoid are markets with over supply, vacant older style properties without any development up side and industrial properties with high rental rates yet short WALEs.
Areas of continued demand include the Melbourne Airport precinct, west of the Essendon Football Club Training Facility in Tullamarine. Demand for larger warehouses, distribution centres and other transport and logistics facilities is expected to continue to grow in the south-east, where developers are listening to and meeting tenant and occupier requirements. Green eld land available throughout suburbs such as Keysborough, Dandenong South, Lynbrook and Cranbourne West are expected to be sought at strong levels, with rates breaking the $400 per square metre of land area barrier (for sites under 4,000 square metres).
In addition to the above, further opportunities foreseen in the market are those properties with solid cash flows underpinned with medium term redevelopment potential. 
A new factory in Epping Central Industrial Precinct has been sold for $1.27 million (pictured below).
<a href="https://www.realcommercial.com.au/property-industrial+warehouse-vic-epping-502692170" target="_blank">Located minutes from the Epping Fruit &amp; Vegetable market, Western Ring Road, Hume Highway &amp; Cragieburn bypass</a>, the total building area of the property is 827 square metres (732 square metre floor plus 95 square office), and the total land area is 1200 square metres.
It also includes 13 car bays.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/3/8/epping%20.jpg" alt="">
</body></html>

Strong demand for small scale Melbourne industrial units: HTW

<html><body>
Industrial and logistics occupiers are on an overall basis, optimistic about the future with a majority hoping their businesses will be better off financially over the next 12 months, according to a new survey by commercial real estate firm CBRE.
According to the Industrial and Logistics Occupier Survey Report by CBRE, 66% of respondents expect their business to be better off financially, while a quarter said expecting things to stay the same over the next 12 months (Figure 5).
<a href="https://www.propertyobserver.com.au/images/2017/09/25/CBREchart1.png" target="_blank">Click to enlarge</a>
 <img src="https://www.urban.com.au/images/2017/09/25/CBREchart1.png" alt="">
CBRE engaged TNS Kantar for the survey that aimed to gain a better understanding of decision making, future plans and how changes in technology are impacting the industry. 
The warehousing and distribution sector is the most positive with 86% of respondents expecting their business to be better off, while 61% of the transport sector had a positive financial outlook (Figure 6).
<a href="https://www.propertyobserver.com.au/images/2017/09/25/CBREchart2.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/25/CBREchart2.png" alt=""> 
Increases in road tolls, particularly in Melbourne, and the introduction of a container charge to be levied on transport companies at Melbourne and Sydney ports may have been a factor for the flatter score, CBRE said.
“Victoria is experiencing stable economic growth and solid wage growth. These favourable economic conditions have been reflected in the results of the survey,” said the report.
Victorian businesses have the strongest outlook with 76% expecting their business to be better off than what it is now while only 65% of NSW businesses said the same.
Furthermore, 48% of Victorian businesses are considering hiring more staff compared to 29% for NSW businesses. NSW’s softer results follow a period of very strong economic growth driven by construction activity in the housing and infrastructure sectors which is easing from high levels - the slowdown in momentum may have driven the flat results.
On the other hand, 70% of Queensland based survey respondents expect to be better off which reflects a period of flat economic performance which is now turning around, encouraging positivity in the sector. 
<a href="https://www.propertyobserver.com.au/images/2017/09/25/CBREchart3.png" target="_blank">Click to enlarge</a>
 <img src="https://www.urban.com.au/images/2017/09/25/CBREchart3.png" alt="">
Australian manufacturing has recorded negative Gross Value Add (GVA) growth for the past 18 out of 19 quarters and has been a significant drag on industrial output. Conditions in manufacturing remain mixed, although not all areas are contracting. 40% of manufacturing respondents indicated that they were expecting a high level of staff growth over the next 12 months; however, the sector also had the highest level of staff contraction (17%). As the Australian manufacturing industry shifts towards a smaller scale, high technology offering, there will be a shift in the number of staff required in each facility.
Overall, the survey suggests the strongest net growth is in the retail and warehousing industry closely followed by transport. Unsurprisingly, manufacturers have the lowest net growth expectations.
</body></html>

prateek24-ezbwHMbNAk

Industrial and logistics occupiers positive on growth outlook: CBRE survey

<html><body>
Melbourne and Coffs Harbour are approaching the peak of market cycle though there are none at the peak position, according to valuation firm Herron Todd White's industrial property clock for May.
There's none in the 'starting to decline' category as well, although competition is hot in the rising market position, with Sydney also a rising market. 
The others in this category are Hobart, Ballarat, Bendigo, Burnie, Devonport, Echuca, Gold Coast, Launceston, Lismore and Sunshine Coast. 
There are no changes to the clock as well in terms of positions. Two capital cities, Adelaide and Darwin, are at the bottom of the cycle with Perth approaching the bottom of the market as well. 
 
<a href="https://www.propertyobserver.com.au/images/2017/05/19/Screen%20Shot%202017-05-19%20at%2011.10.35%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/19/Screen%20Shot%202017-05-19%20at%2011.10.35%20AM.png" alt="">
Two other capital cities, Brisbane and Canberra, are at the start of the market recovery period, the clock shows. Others in recovery mode are Cairns, NSW Central Coast, Horsham, Mildura, Rockhampton and Tamworth.
While Coffs Harbour may be approaching the peak of the industrial market cycle, the rental market remains price sensitive with a broad range of rents being achieved which confirms the uncertainty in the market, say HTW. There remains a slight oversupply of smaller industrial bays in the lower price bracket and valuations of poorly leased property will invariably be lower than those with vacant possession for this owner-occupier dominated market. This is not the case for larger properties where investors are active and the strength of leases is vital to yield and value levels. 
There has been a low sale offering of large industrial property in 2017 and subsequently low volume of transactions. Available sales indicate firm yields, echoing the low interest rate climate. There is some development activity within the prime estates, with most purpose built to end user requirements. Land prices in Coffs Harbour should continue to trend upwards as supply diminishes, say HTW. 
So far in 2017, the industrial market in Melbourne has been tracking well, with a “noticeable increase in values” over the previous 12 months, according to HTW. The market has been assisted by continually low interest rates, low rental levels which continue to be stable and an increasing demand for smaller warehouse units. 
The industrial property market is expected to be fairly positive throughout 2017, says HTW, provided there is no oversupply or external shocks to the market.
 
 
</body></html>

Industrial Market

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Industrial Market

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News