Loganholme leads southside’s industrial revolution

A large warehouse development south of Brisbane is buoying the southside industrial property market, fuelling interest and values in a suburb which is bucking property trends in the southeast.

Loganholme is situated on the M1 Pacific Highway between Brisbane and the Gold Coast and the Logan Motorway.

A LARGE warehouse development south of Brisbane is buoying the southside industrial property market.

A massive 11,280sqm of industrial warehouses and offices will be built in Loganholme over the next 18 months.

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A large slice of that, or 5345sqm, is at 14-16 Cairns St, Loganholme, where construction is under way for warehouses, factory space and industrial sheds, offices and showrooms.

The Cairns St project includes six warehouse buildings with office space and is due to be completed by Christmas.

A further 5935sqm has development approval across two sites and building is expected to start by October.

Loganholme’s “industrial revolution” and the influx of new warehouse sites follows a two-year lull in the Brisbane industrial property market with only 168,506sqm of new properties built last year, the lowest since 2010.

Cairns St, Loganholme, where there is a rise in industrial property.

Ray White Commercial head of research Vanessa Rader said Loganholme was bucking the trend with industrial property values slowly rising.

She said until the proposed new industrial sites hit the market, the lack of stock would continue to push values up for older sites over the short term.

“Older-style freehold assets are also available across this industrial precinct and often attract a higher capital value,” she said.

“Values achieved in 2019 are in line with those in 2018 in a market where quality assets have been tightly held, coupled with greater difficulty in obtaining finance.

“Low interest rates have resulted in many owners holding their assets due to the attractive returns compared to other investments such as shares, bonds or residential property.”

Ellison Specialised Property real estate agent Tony Morena, who is selling the new industrial sites at Loganholme, said buyers were willing to pay premium prices for new industrial property which was well located.

“Buyers and tenants are looking for higher-end quality industrial sites, where they can take international clients and still be close to transport routes going north, south and west,” he said.

“In Loganholme, to rent an industrial site costs between $130 to $160 per square metre.

“To buy a new industrial site ranges in price from $1850 to $1950 per square metre.”

One of the new industrial sites at Cairns St, Loganholme.

Knight Frank analyst Jennelle Wilson said long-term tenants and “major occupiers” in the Brisbane market were also paying higher rents for new, premium-quality buildings.

“With 30,401sqm of development completed already in 2019 in Brisbane and a further 261,690sqm under construction for completion this year, supply is expected to almost double over the 2018 levels,’ she said.

Ms Rader said Loganholme’s rise in the property sector would continue with low interest rates and more accessible financing.

“While this market is dominated by owner occupier buyers, investment stock is also hotly contested across Loganholme,” she said.

“The lower price point is attractive to many private investors which has aided in driving yields to average 6.3 per cent over the past 12 months, well below the 7.75 per cent to 9 per cent range achieved in 2016.”

■ The Loganholme market is home to a mix of property types but largely comprises industrial premises, notably modern industrial strata unit facilities which include office space.

A strong owner occupier market, over the past five years, there has been an increase in purchase price, which now averages $1620 sqm as more investors have speculated in commercial assets. Despite this average, values represent a wide range between $1100 sqm to $1900 sqm depending on the size, age and access of the unit.