Brisbane’s industrial market has recorded a new time on market for industrial speculative builds, with Savills Research recording it sitting at just under 7.5 months.
This time on market has drifted slightly higher from under 6 months in the two years that Savills has been tracking the data.
The Savills Speculative Industrial Development Analysis reports that the average building size has dropped marginally to 10,162sq m and the average face rental is steady at $113/sq m.
We believe the study is reflective with what has been transacting across the market. Incentives, although difficult to report, are certainly trending higher with some incentives reported to be in excess of 20%.
The report also found that 25% of buildings are occupied prior to practical completion, whilst 15% of these buildings have had a vacancy period longer than 12 months.
There are four buildings within the report that have had long term vacancy and in each instance it appears that the lack of flexibility in design has caused this extended vacancy. If these four buildings are removed from the equation, the time on market drops considerably to only 3.8 months.
The speculative development market is dominated by the institutional owners with only two of the 32 buildings surveyed being built by privates.
Currently there is 24,144sq m over two buildings currently under construction, one within the Trade Coast Region and the other along the Logan Motorway Corridor.
A trend we’re seeing is that buildings designed with the most flexibility regarding tenancy areas are being leased out considerably quicker than ones that only offer a single option.
The report also outlines that the face rents being achieved by speculative built buildings is higher than that of the pre-lease market.
If you would like to request a copy of the full report, click here.