AUSTRALIA TRADECOAST INDUSTRIAL LAND SUPPLY REPORT November 2019
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Accelerating success. AUSTRALIA TRADECOAST INDUSTRIAL LAND SUPPLY REPORT November 2019 Freehold Land Supply in Critical Shortage Accelerating success. MAXIMISE THE POTENTIAL OF DATA IN-DEPTH DATA At the forefront of the real estate industry, we Granular datasets covering historical understand the demand and forecast data with over 2,000 datapoints updated quarterly. for reliable and accurate data is more prevalent than ever. Our enterprising technology, Colliers Edge, offers comprehensive DETAILED property data that enables TRANSACTIONS you to delve deeper into the Australian property Individual reporting of market, using data to major transactions. become more informed and deliver enduring value. 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Joanne Henderson Director | Research +61 410 391 093 [email protected] colliers.com.au/colliersedge AUSTRALIA TRADECOAST LAND SUPPLY | Colliers Radar | November 2019 By Karina Salas ATC Industrial Land Supply | 606ha Research Manager | Research [email protected] FREEHOLD LEASEHOLD LAND SUPPLY LAND SUPPLY Summary 151ha of flood-free land 455ha available at the Freehold industrial land supply (outside the Port of supply in the suburbs Airport and the Port Brisbane and the Brisbane Airport) is in critical shortage, available for development with circa 151ha (1ha and above) identified as vacant and available for industrial development own a freehold basis. 231ha 224ha This represents less than 25 per cent of the estimated land available for reclaimed site supply within the ATC precinct over the medium term. immediate and at the Port medium-term providing at the Airport long-term Leasehold land supply within the ATC (located at the and the Port supply Brisbane Airport and Port of Brisbane) is estimated at 455ha, representing over 75 per cent of the land supply. 119ha of flood-free 112ha of land land supply at the supply at the Port Total land supply available for industrial development on a Brisbane Airport of Brisbane freehold and leasehold basis is estimated at circa 606ha. Circa 381ha (or about 60 per cent of the total estimated land supply) of vacant industrial-zoned land is available for ATC Economic Contribution Leader of import trading value in the state immediate and medium-term development. Circa $2 billion air and road transport infrastructure investment Precinct in need of dedicated rail transport connectivity Industrial land supply at the Brisbane Airport has been strategically staged in response to demand levels. The Brisbane Airport offers circa 12ha of construction-ready industrial-zoned land at Export Park. The Airport Industrial This analysis assumes that the land supply available at the Airport and Park offers the largest industrial land supply available of the Port is most likely being released to the market on a leasehold basis. 107ha for release between 2020 to 2030. In order to forecast the demand for vacant industrial-zoned land and assess the extent of the current supply, this analysis has identified the The Port of Brisbane offers 112h of land available for take up of land within the ATC from 2016 to 2018. For the purpose industrial expansion and 224ha of reclaimed land in of this analysis, take up of land is defined as an industrial-zoned land Fisherman Island, being the main location for long-term developed or occupied in any form (including containers and sites industrial expansion (most likely on a leasehold basis) under construction) over the assessed period. within the ATC. Current road and air infrastructure investment of circa $2 Global hub underpining billion supports the precinct’s growth potential and would economic internationalisation provide a competitive advantage for logistic operators. The ATC region is an international trading hub, extending over However, dedicated rail connectivity to the precinct 8,000ha on the bank of the Brisbane River. It is considered a global is crucial to provide competitive access to industrial precinct due to the significant trading and economic activity, the operators located outside the ATC. world-class infrastructure on offer, its global accessibility and its Purpose of study and capacity to compete at an internationally-significant level. The ATC includes 2,700ha of land allocated to the Brisbane Airport assumptions and 1,860ha of wet and dry land allocated to the Port of Brisbane. Colliers International has undertaken an investigation on the Australia According to data publicly available through the Brisbane Marketing 1 TradeCoast’s (ATC) vacant industrial-zoned land to assess the extent website, the ATC is comprised of 32 industrial precincts offering and location of industrial land supply available. The analysis quantifies freehold and leasehold opportunities for low, medium and high the amount of vacant land (1ha and above) zoned as industrial or impact industries and mixed-used purposes. The ATC is also a solid industry investigation, free of flooding constraints (with the exception economic contributor, employing over 60,000 people spread across of the Port of Brisbane) and available for industrial development. 1,500 businesses. For the purpose of this analysis, the suburbs within the boundaries The ATC contribution to the Queensland economy is forecast to of the ATC precinct are Brisbane Airport (the Airport), Eagle Farm, reach $9.4 billion by 2026, which is equivalent to 2.1 per cent of the Fisherman Island, Hamilton, Hemmant, Hendra, Lytton, Morningside, forecast Gross State Product (of $434 billion by 2026). The number Murarrie, Pinkenba, Port of Brisbane (the Port), Tingalpa and of employees is also forecast to increase to 110,000 by 2026, Wakerley. representing an increase of 83 per cent. 1Brisbane Marketing is Brisbane’s economic development board. 3 AUSTRALIA TRADECOAST LAND SUPPLY | Colliers Radar | November 2019 Key advantages within the precinct include: A recent report prepared by Deloitte Access Economics and commissioned by the Port of Brisbane revealed that a dedicated • Strategic location for global industrial operators looking for easy freight rail connection to the Port could create an additional $820 accessibility to one of Australia’s fastest growing container ports million in economic and community benefits, while also taking 2.4 (the Port of Brisbane) and the largest capital city airport (the million trucks off the city roads. Brisbane Airport). • Located 6-20km from the Brisbane CBD in a centralised The State and Federal Governments are currently funding a joint location within South East Queensland and offering flexible study to look at the feasibility of this project. The findings of the study town planning schemes supporting industrial development. are scheduled for release this year. Infrastructure Australia considers this project a high priority initiative reflecting its significance. • Closest eastern capital city port to Asia, which is up to five sailing days closer than the ports of Sydney and Melbourne. Colliers International maintains the view that this government support • Direct access to more than 30 international and domestic is critical to maintaining the competitiveness of the international airlines via the Brisbane Airport and over 40 shipping lines trading activity in South East Queensland. The scarcity of freehold servicing the Port of Brisbane, with business activity operating land available within the ATC displaces industrial operators needing 24/7. access to international markets, hence there is a need to improve connectivity between the other industrial precincts in South East Solid investment in road and air Queensland. infrastructure The ATC is a global trading precinct supporting 20 per cent of the export value and nearly 85 per cent of the import value in Queensland. Considering the precinct’s contribution to the state’s economy and its growth potential, investment in air and road infrastructure projects in the range of $2 billion are under construction within the precinct. 1. $1.3 billion new Airport Runway The Airport’s new runway is the largest aviation project currently under construction in Australia. It is funded by Brisbane Airport Corporation, an unlisted private-sector company. This project is expected to reach practical completion by mid-2020, providing the most efficient runway system in the country and doubling the airport capacity to support passenger and cargo growth. 2. $650 million Kingsford Smith Drive upgrade The project entails widening the road from four to six lanes and road improvement works along different areas on Kingsford Smith Drive. This project is forecast to increase the road capacity to accommodate future traffic volumes and reduce traffic congestion saving up to 30 per cent in commute time. Lendlease is building the project, with completion scheduled for 2020. Dedicated rail connectivity is critical to support competitive international trading activity Freight through the Port has increased at a compound annual rate of 4 per cent over the past five years, from 1.1 million twenty-foot equivalent units (TEUs) in June 2014 to 1.3 million TEUs in June 2019. According to the Port of Brisbane 2018 Master Plan, the Port forecasts to handle up to 4.8 million containers by 2048. Based on these projections, dedicated freight rail infrastructure connecting