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Brisbane's other property market continues to surge

Business

Brisbane’s house prices may have recorded their first price fall in two years but the commercial property sector is still booming with about $5 billion has been invested in Queensland’s market this year, according to Colliers.

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Investment activity in Brisbane’s office market in 2021 was also strong at $2.7 billion and the company believes Queensland was entering a period of growth with a population surge, a growing economy, a rise in innovation and demand for lifestyle the key drivers.

The CBD alone captured $1.4 billion.

Brisbane’s industrial sector had seen an “unprecedented” 12 months as investment and occupier volumes reached new levels and yields fell to record lows in all submarkets.

Owners were now holding off bringing assets to market because they were waiting for an upswing in rents

Colliers industrial managing director Gavin Bishop said the market for 2022 was expected to continue strongly with solid fundamentals.

“While existing fundamentals such as e-commerce, infrastructure investment and automation will remain key drivers for demand, population growth in Queensland is currently the strongest in the country and will amplify demand for warehouse space off the back of growing consumption levels,” Bishop said.

“However, fewer assets have been brought to market in 2022 which has constrained investment volumes.”

Bishop said there was positivity about the decade ahead in the runup to the Olympics and institutional investors who had previously targeted Sydney and Melbourne were now looking at Brisbane as rental growth is expected to surge.

“Positivity around the golden decade that lies ahead for Queensland is expected to drive further capital into the local industrial and logistics sector, particularly from new capital sources,” he said.

Colliers said buyer confidence had returned to the office sector. Domestic institutions had dominated the market, but Brisbane should see an influx of foreign capital now the borders were open.

In the retail sector, capital has been moving to neighbourhood centres and there was strong demand from investors for high quality assets, according to Colliers retail capital markets Asia Pacific managing director Lachlan MacGillivray.

“The return of both domestic and international tourists bodes well for Queensland’s retail sector,” he said.

“It is clear that investors are still attracted to the positive fundamentals Queensland has to offer with first half sales volumes already reaching over $1.45 billion which equates to almost 40 per cent of total retail transactions across the country.”

 

 

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