Emerging Brisbane Market Headlines Resurgent Industrial and Logistics Sector

Brisbane’s Industrial and Logistics sector saw a gross take-up of 802,000sqm in 2024, as investors target new growth regions.

Australia’s Industrial and Logistics (I&L) sector showed incredible resilience throughout 2024 despite the subdued economic growth, with a notable boost in emerging markets like Brisbane, Adelaide and Perth.

Following a strong recovery in I&L take-up in Q3, the last quarter continued to gain momentum to record 896,200sqm of gross take-up and bring the total 2024 take-up level to 3.5 million sqm.

The resilience of the national gross take-up activity was supported by Brisbane, Adelaide, and Perth, with all three cities recording annual gross take-up volumes 40 per cent higher than their respective 10-year averages, with Brisbane’s performance especially noteworthy.

“Despite its market size being only 42 per cent of Melbourne’s and 58 percent of Sydney’s, Brisbane recorded 802,000 sqm of gross take-up in 2024. The narrowing gap between Brisbane and Sydney and Melbourne’s annual take-up suggests a potential shift in national industrial demand patterns, reflecting Brisbane’s growing role as a key distribution hub and its attractive cost basis relative to those cities,” Gavin Bishop, Colliers Managing Director Industrial and Logistics said.

“In the first half of the year, the increased vacancy levels provided tenants with expanded options, naturally extending decision-making timeframes as occupiers carefully evaluated their strategic requirements. However, the second half witnessed occupiers re-engaged with the market, demonstrating clear preferences for high-quality assets that offered superior connectivity to population centres, industry peers, and major infrastructures.”

Once considered a secondary location, Yatala has transformed into a prime industrial hub, with market average land value for 1-5 ha sites increasing by up to 90 per cent since 2020, driven by its availability of land during a period of constrained supply elsewhere.

On top of this, the Australian TradeCoast (ATC) has seen land values skyrocket by 136 per cent over the past decade, with a 57 per cent increase in the last five years alone. The precinct has seen substantial investment over recent years driven by demand for modern flexible industrial spaces. Capital values in the ATC are 20 per cent to 25 per cent higher than in other precincts, driven by its proximity to the port and airport and other infrastructure.

“Brisbane’s industrial property market emerged as a standout performer in the post pandemic landscape, attracting greater exposure and investor interest than other asset classes. This success was largely attributed to shifting consumer behaviour and the asset class’s consistent performance, marked by strong rental demand, low vacancy rates, and solid yields,” Colliers Associate Director of Research, Pragya Sharma said.

“As preparations for the 2032 Olympics accelerate, the state’s growth is set to continue, unlocking significant economic potential and creating opportunities within the industrial property sector.”

“We expect Brisbane’s market activity will further increase as both domestic and offshore investors continue to show strong interest, driven off the back of the solid investment fundamentals, booming population growth, and an influx of infrastructure driven by the 2032 Brisbane Olympics. On top of this, the Foreign Owner Land Tax (FOLT) surcharge in Victoria is impacting capital flows from offshore and domestic investors towards Brisbane, which is a positive sign for the market. We expect to see increased investment volume in 2025 with yield compression likely to be seen in the second half of 2025,” Mr Bishop added.