Big deals have industrial market set to soar

A string of significant and imminent deals is expected to blow last year’s industrial property sales results away.

Despite the first half of 2015 being the slowest for industrial property since 2010, a looming rush of major deals in the second half of the year are tipped to send sales soaring past the $5.4 billion recorded in 2014.

Just $878 million worth of industrial property changed hands in the six months to July, but CBRE data predicts a dramatic swing over the next five months.

On the up: Boom time for industrial property sales

The second-half resurgence will be headlined by the sale of the enormous GIC portfolio, which is expected to net around $1 billion, while the sale of the Coles Distribution Centre in Sydney to be finalised in the next two months for an expected price of $253 million.

Given the strength of investor appetite at present, new prime logistics opportunities coming to market are being snapped up by buyers eager to gain a footprint in what is increasingly regarded as a highly attractive sector

Another large-scale cold store facility in Victoria is also in the due diligence phase.

CBRE regional director of industrial and logistical services, Matt Haddon, says the sales pace will continue to gather steam in the latter half of the year.

“With a number of major deals either being marketed or in due diligence at present, sale volumes are on track to top the $5.4 billion achieved last year,” Haddon says.

“Given the strength of investor appetite at present, new prime logistics opportunities coming to market are being snapped up by buyers eager to gain a footprint in what is increasingly regarded as a highly attractive sector.

Iconic building: Former Dairy Bell factory hits the market

But the rezoning of industrial land to residential will put increasing pressure on the industrial market as developers pounce on potential sites, according to CBRE’s research.

This change of traditional industrial land use trend will increasingly bring new tenant enquiries to the market and stimulate development and investment supply, as occupiers relocate to free up sites earmarked for higher and better use,” Haddon says.

Here’s how your city performed in the second quarter of the year.

Sydney

Foreign investor Investec’s $19.2 million purchase of a property at 66 Glendinning Road, Glendinning, was among 10 sales totaling $177 million.

This property in Glendinning sold in the second quarter of 2015

Melbourne

Industrial investment almost doubled in comparison to the three months to April, with $277.4 million in sales, including two properties sold for more than $35 million each in Laverton North and Knoxfield.

Brisbane

Brisbane made up some ground on the $52 million of sales in the first quarter of the year, transacting more than $123 million, including a $17.5 million property at Yatala.

Adelaide

CBRE’s report says Adelaide’s industrial sales activity has gained momentum over the past 18 months, thanks in part to five large warehouses being sold with vacant possession.

Perth

One of the largest sales across Australia for the quarter came when a 100,000sqm property at Spearwood Industrial Estate was sold for $33 million.