Between the Townsville to Mackay coastline and the Northern Territory border, a potential $18 billion in private and public sector investment in major projects is changing the dynamic in the industrial markets in both major regional cities.

The changed dynamic includes new areas of industrial development in Mackay and Townsville, and increasing product size for new lots and new facilities.

The industrial market in Mackay has been the top regional Queensland performer for two decades and with the Mackay State Development Area (SDA) being announced in February this year the opportunity to further diversify and extend the quality of this industrial development exists. The recent unveiling of concept designs for a state-of-the-art pilot critical minerals processing plant, called FlexiLab, in Mackay, is evidence of this emerging diversity.

The high-quality tenant requirement from suppliers and service operators to the Resources sector requires high-quality industrial facilities, and the industrial premises in Mackay are among the best across regional Australia. Now, its future will only be boosted by the SDA and Critical Minerals focus.

The area for new industry development in the SDA covers 907 hectares incorporating two distinct parts – the Racecourse area, comprising 137 hectares centred around the established Racecourse Mill, around five kilometres west of Mackay, and the Rosella area, which is comprised of 770 hectares of land located 10 kilometres from Mackay.

The Townsville Industrial sector has been very expansive and generally dominated by the BM Webb group. Now, the progress of new development areas directly accessing the Townsville port is changing the nature of supply to meet new demand, and this demand is clearly dominated by logistics operators, larger shared processing facilities and even private sector innovators. The JetZero commitment to providing aviation fuel is an example of the new innovators.

While the locations for new industrial supply emerge in Mackay and Townsville , the demand profile requirement is also steadily changing, reflecting the confidence operators have in the capacity of Northern Australia to produce resources and products that meet international demand, and the nature of the established infrastructure and workforces.

The confidence is evident in the Industrial property sectors in both cities by the increase in the average sized industrial lot. The average lot size sold in Townsville is now over 7,000sq m, compared with 4,000sq m in 2019. Demand for industrial lots in Mackay is more regularly received for lots above 5,000sq m, rather than the 2,000 to 3,000sq m enquiry received pre-COVID.

The larger lot sizes are still attracting increased pricing with rates per square metre in both cities above $160 per square metre.

By Craig Stack, Knight Frank Senior Partner Townsville and Mackay.