Adelaide’s industrial and logistics market is benefiting from an inflow of eastern seaboard investors looking to capitalise on increasingly attractive high yields.
According to CBRE’s Q2 2016 Industrial MarketView, enquiry from international investors has increased with many looking for high quality assets with higher yields than east coast markets.
CBRE Industrial & Logistics Director, Adelaide, David Reid, said offshore groups were increasingly looking to Australia to inject capital into low risk assets, such as real estate.
“In addition to a continual flow of new entrants to the Australian market, we’re starting to see investors with an existing presence in the industrial & logistics market now looking to a greater spread of locations to balance their portfolios and seek out enhanced returns,” Mr Reid explained.
“There has been a significant uplift in interest for assets in South Australia, with an attractive yield spread in the state’s industrial market increasing investment appeal.”
Mr Reid said there had been a significant uptick in sentiment in South Australia’s industrial market, with a jump in the number of leasing enquiries for space over 5,000sqm.
“The manufacturing sector recently received a boost from the government’s announcement to award a $50 billion contract to construct 12 submarines at Adelaide’s Osborne Shipyards beginning in 2018,” Mr Reid said.
“As the South Australian market continues to transition from its manufacturing base, logistics occupiers and corporate retailers are the main sources of tenant enquiry.”
“This is particularly positive given South Australian has previously not experienced high levels of demand from these occupier types.”
Mr Reid said the more positive conditions emerging in the state’s industrial market would support future development of stock, with potential for new construction to commence shortly.About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
