Rebound in Queensland’s population growth has been behind the bouyancy of the industrial leasing market

Population growth is one of the major reasons an increasing number of companies taking up more leasing space in the Queensland industrial sector.

Population growth is fueling indsutrial leasing demand.

A STEADILY rising Queensland population has helped fuel a surge in industrial leasing.

According to JLL, the Brisbane industrial sector is responding positively to Queens­land’s population growth and better economic news.

Gross take-up of industrial space in the first three quarters of 2017 totalled 392,000sq m, which was just behind last year’s numbers and will ensure this year will outperform 2016.

JLL senior analyst Tom Broderick said the result to date was off the back of a very strong third quarter, in which more than 204,000sq m of take-up was recorded.

“This demonstrates a strong rebound in tenant demand and leasing activity, and suggests Brisbane will perform well ahead of its 10-year average take-up rate of just over 400,000sq m,” he said.

Mr Broderick said a rebound in population growth had laid the foundation for the leasing performance.

According to the Australian Bureau of Statistics, Queensland’s net interstate migration shrunk to just 6400 in 2014-15. But latest data shows in 2015-16 it almost doubled to 11,600.

This has corresponded with an overall population increase of 75,400 or 1.6 per cent in the year to March, much of it made up of natural increase and about 20,000 plus in net overseas migration, which is on the rise.

Mr Broderick said with interstate migration starting to favour Queensland, thanks in part to relatively low median house prices, industrial demand should continue to grow over the next 12 months.

“Population growth is one of the main drivers moving forward. Both interstate and overseas migration to Queensland has picked up over the past 12 months. This is important as it drives growth in consumption, which clearly impacts the industrial market,” he said.

“JLL research has identified a correlation between population growth and industrial take-up. On average, each additional person triggers 5sq m of industrial take-up.”

Mr Broderick said improved economic conditions in Queensland were also flowing through to the industrial sector. Unemployment currently stands at 5.9 per cent with 98,600 jobs created over the past 12 months.

State Final Demand grew by 1.1 per cent in the past quarter, with year-on-year growth of 2 per cent.

JLL director of Industrial in Queensland Aaron Bates said more than $541 million in sales were recorded through the first three quarters, with the bulk of activity occurring in the sub-$30 million pricing bracket.

“Investor demand remains strong, and is likely to further strengthen now we have evidence of stabilising prime rental rates,” he said.

Mr Bates said container trade through the Port of Brisbane grew by 11.6 per cent for the year to September 2017 which has boosted demand for industrial space.

“This is a significant improvement on the year before, when growth was 3.7 per cent, with the main drivers being agricultural exports and the importation of electrical equipment, building products and household items,” he said.