Industrial Property Outlook

I have just read an article on the industrial property market in Newcastle and the Hunter that I thought was worth sharing.

The article was written by Trent Robertson of Colliers International. We work closely with Trent and his associate Byrne Tran, in referral of matters relating to sales or leasing of industrial property.

The key message I took from the article was the renewed confidence in the region from many sectors with both investors and developers wanting to take advantage of the current market and opportunities.

There is a record infrastructure spend in the Hunter region with an estimated $6.5 billion being spent on projects that are currently underway funded by federal, state and private funds. The major projects underway right now include the Newcastle R.A.A.F Base ($1.5 billion), light rail project ($260 million), Newcastle interchange ($200 million), University of Newcastle city campus ($95 million) and Newcastle airport ($80 million).

Investment demand and interest in our region also remains strong with underlying yields firming and enquiry levels increasing. For the first half of the 2017 financial year, the average market yield from the port and inner Newcastle properties was at 8% for the north-western region 8.25% and south-western region 8.5%.

Industrial land values also remain strong due to the increased enquiry and tightening of supply.

The stars seem to be aligning! The confidence and boost in infrastructure investment has come at a time of strong building and residential construction sector with the number of units being built (particularly inner Newcastle city) and renewed confidence in the mining and resource services sector. This is being driven by coal spot prices doubling from their low of US$90 per tonne. With coal prices around US$180 per tonne continued growth and demand for industrial property is expected.

If you would like a copy of the complete article or to be put in contact with Trent or Byrne, please do not hesitate in contacting your Maxim adviser.

Steve Roxby
Director

 

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