Industrial land values in Australia are being driven by major infrastructure projects and rapid population growth particularly on the East Coast, according to Colliers International’s latest Research and Forecast Report (RFR).

The Colliers report states that at the second half of 2019, Sydney’s industrial capital values ($3,258 per square metre) and land values ($1,261 per square metre) are the highest in the country, representing an 8 per cent and 4 per cent increase respectively, on the previous six months of the year.

Melbourne has the second highest capital value for the same time period ($1,975 per square metre) followed closely by Brisbane ($1,874 per square metre).

At a glance:

• Sydney’s industrial capital values ($3,258 per square metre) and land values ($1,261 per square metre) become the highest in the country
• Over the past five years, Sydney has reported an increase in industrial land values in the range of 85 per cent to 215 per cent; Melbourne’s land values have increased between 25 per cent and 105 per cent and Brisbane’s between 25 per cent and 50 per cent.
• Billion-dollar infrastructure projects currently under construction having significant impact on Australia's industrial market 

Over on Australia’s west coast, Perth recorded the country’s second highest land value ($438 per square metre) followed by Melbourne ($393 per square metre).

According to Colliers Internationals’ report, these prices are being determined by major transport infrastructure projects which play a critical role in shaping the dynamics of how a country uses its labour force and capital. 

Managing Director Industrial at Colliers International, Malcom Tyson, said that the Australian transport infrastructure network had entered an era of transformation and renewal.

“There is an estimated $133 billion of committed projects under construction and over 65 per cent of this investment is scheduled for completion in the next three to five years,” Tyson said.

“There can be no doubt that the current transport infrastructure investment is set to transform the outlook of the industrial market for operators, developers and investors alike.” 

Several infrastructure projects currently under construction on Australia’s East Coast are expected to have a significant impact on the way the county’s industrial market operates, according to the report.

These include; the $16.8 billion Westconnex project in Sydney; the $6.7 billion West Gate tunnel project in Melbourne and the $10 billion Inland Rail project which will expand and connect supply chains across Melbourne and Brisbane international and domestic markets.

The Colliers International Industrial RFR also highlights that the value of industrial land is being driven by rapid population growth while the transition from bricks and mortar retail to ecommerce retail was continuing to change industrial activity.

Sydney has reported an increase in industrial land values in the range of 85 per cent to 215 per cent for the past five years; Melbourne’s land values have increased between 25 per cent and 105 per cent and Brisbane’s between 25 per cent and 50 per cent.

“Rapid population growth and high population density in the East Coast underpin the increase in land values throughout the largest capital cities, as land availability for industrial development becomes limited and its use is restricted to other purposes, particularly in proximity to the CBD,” said Simon Andreatta, Head of Industrial Valuations at Colliers International.

Click here to read the full report Industrial RFR H2 2019

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