Investment turnover in Brisbane’s industrial market has strengthened as institutional buyers regain momentum and greater certainty around interest rates emerges, according to the latest research from Knight Frank. 

It found industrial turnover of $356 million (of $10m+ sales) was recorded in Q3, a circa $55 million uplift from Q2, as investment volumes continue to recover from the lows of 2023.

Knight Frank Partner, Research and Consulting Queensland Jennelle Wilson said the weight of capital seeking Brisbane industrial indicates a slight firming of super prime yields to 5.78%. 

“Greater interest rate certainty and a lift in transaction activity and buyer interest has resulted in slight prime yield firming to 6.16%,” she said.

“Secondary yields tightened during the quarter, returning to levels of a year ago, with the underlying land values and ongoing rental growth supporting the market.”

Knight Frank Head of industrial Logistics Queensland Mark Clifford said Brisbane’s industrial market was solid, but the strongest part of the market was industrial land sales.

“There is extremely strong demand for land from both developers and owner occupiers but a shortage of supply in Brisbane, resulting in climbing land sales rates,” he said.

“Over the past 12 months we have seen land values rise by nearly 23%.

“We also expect investment activity to lift again over the last quarter of this year and into 2025, with land values to retain their strength.

“The leasing market has normalised in Brisbane following several years of strong growth and we also expect to see a return to higher activity next year, with an anticipated pick up in demand.”

The Knight Frank research found vacancy in Brisbane’s industrial market was 11% higher in Q3, with more than half the new vacancy being from speculative construction starts. Leasing take up was also lower at 173,423sq m, with transport, postal and warehousing making up 26% of leasing activity.

The data found net face rents had steadied across most precincts after a sharp increase in Q2, with annual growth moderating to 6.2% for prime and 5.8% for secondary. 

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