Queensland is in the midst of a fast-paced transformation. Economic fundamentals have shifted in response to infrastructure delivery and a spike in population growth that was driven by Covid.
Once considered a state for retirement, Queensland’s growth in Gross State Product (2.1%) outpaced Victoria (1.5%) and NSW (1.2%) in the latest analysis from the Australian Bureau of Statistics.
Queensland has a strong reliance on the construction sector – and will continue to influence – demand across industrial property markets. Secondary industrial yields vary between 6.25-7% dependent on location, tenant and lease terms.
Preparations for the 2032 Brisbane Olympics and Paralympics will further transform the economy.
Construction workforce rises
For commercial property investors, understanding where workforce demand is growing helps identify assets with long-term leasing potential.
Early last year, Job and Skills Australia estimated 279,000 people as of early 2024 according to the Australian Government. Year-on-year, that represents a 10% state-wide increase.
Growth was concentrated in Brisbane and the broader South-East Queensland region, with an employment increase of nearly 15% year-on-year, driven by housing supply projects, civil works and preparations for the Olympics.
Most recently, the Queensland Government found jobs in the local construction sector increased 2.3% in the June quarter, outpacing the national average (1.2%). Demand for technicians, tradespeople and machinery operators is higher in Queensland than the national average.
There’s a steady pipeline of project managers, electricians, civil engineers and heavy machinery operators seeking industrial properties for operations, equipment and materials storage and fleet parking.
Demand continues to favour sites in proximity to arterials, boast quality hardstand and flexible zoning.
Bromley Real Estate continues to build a database of businesses seeking opportunities around greenfield development hubs in Logan, Ipswich, City of Moreton Bay Council region and the northern Gold Coast.
Where else will demand come from?
At the recent Smart Cities and Energy Efficiency conference in Brisbane, consultants Urbis revealed at Brisbane’s economy would grow by 40% over the next decade, with direct spending on Olympic facilities a small fraction of that growth.
There would be a heavy demand on industrial assets to accommodate the 10-year forecast with:
- Property construction growing by 41%;
- Transport and logistics increasing 43%;
- Advanced manufacturing rising 29%.
There’ll also be demand from:
- Professional, scientific and technical services: engineers, environmental consultants and surveyors. These workforces often co-locate with industrial operations to support design, compliance and maintenance works.
- Utilities and waste services: although smaller in workforce numbers, the sector require industrial depots and workshops for field crews, vehicles and service equipment.
Some people are estimating Brisbane will need an additional 1 million square metres of industrial floorspace in the next five years alone to accommodate growth.
Across the board, current landlords should be reviewing how to future-proof their assets in the changing marketplace; prospective investors should be doing their homework to identify which properties are to benefit from the change that the next decade will bring.
Is your strategy future-proof?
At Bromley Real Estate, our sales and leasing teams actively track tenant movement and leasing activity, helping investors align with future demand.
With strong demand for industrial assets over the next decade, reach out to the team at Bromley Real Estate today to understand how to appeal to high growth and emerging industries across the South-East.