2012 Global Market report - NAI Global

Adelaide, Australia
Brisbane, Australia
Contact
NAI Harcourts
Brock Commercial
+61 8 8203 1399
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
2,969,907
3.5%
$1,297.83
$57,661.88
3.0%
5.1%
4.8%
22.508
The global economic woes continue to influence the
economic growth in Australia. The uncertainty of the
resolution of global issues, which includes the European
crisis, US rating downgrade and reports of a slow down in
China, have had a significant influence on the confidence
of Australian banks and buyers alike.
The South Australian economy reflects the national in terms
of much discussed two tiered economy, i.e. businesses
related to mining and those not. South Australian and
Federal Governments’ recent announcement to support mining
Olympic Dam in SA is genuinely positive, although BHP and
partners still need to fund this with an announcement expected
in 2012. This mine has the potential to make a significant
positive impact on the economy for the next 20 years or more.
Interest rates are expected to remain at 4.75% or slightly
less for 6 to12 months on the basis of ongoing global
financial uncertainty. Buyers and tenants are looking
carefully at moving and purchasing. The banking sector, with
limited funds to lend, is being selective. Opportunistic buyers
are looking more intently at the property investment market
for attractive acquisitions. The number of listings is
beginning to increase but there is still a shortage of major
investment opportunities to gauge market. There is a
continued appetite for investment properties with proven
tenants. Lenders are comfortable providing funding for
properties that offer more secure cash flow but this is stock
tightly held and investors tend to release only marginal
property. CBD office leasing market continues to experience
historically low vacancies.
There is one new building being developed that is not
pre-committed before construction. Current vacancy of approx.
7.8% is expected to decrease in short to medium term. There
is limited new office supply over medium term and positive
absorption, although low take-up rates due to limited supply.
Refurbishment opportunities exist for B and C grade buildings
over the next two to three years as the new ATO tower is
completed. Vacancy is expected to remain above 5% until at
least 2013. The recent announcement of Adelaide Bendigo
Bank pre-commitment for 18,000 plus SM has been the most
significant leasing in the Adelaide market for some time.
The sub-lease market, as a result of a lack of new development,
has tightened. Frame office market continues to attract demand
from office space users with 400 King William Street now 100%
occupied. Fringe office market continues to experience low
vacancies with limited incentives available to tenants.
Contact
NAI Harcourts Brisbane
+61 7 3839 3100
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
2,969,907
3.5%
$1,297.83
$57,661.88
3.0%
5.1%
4.8%
22.508
After serious flooding in the first quarter of the year in
many parts of the state including the Brisbane CBD, the
Queensland economic forecast was revised downwards. The
Australian Dollar strength has had an adverse effect on the
international tourism market. The resources sector has
brought some relief to an otherwise lackluster economy
and corporations continue to take a cautious approach to
investment as they wait for a recovery in the global economy.
The office leasing market in Brisbane has proven many
forecasters wrong with strong demand stemming from
the resource sector and associated services companies.
Vacancies have fallen from 11% at the end of last year to
less than 8% across the city and less than 5% for premium
space in the CBD. Rents have remained stable with
new supply coming on stream next year, while mostly
pre-committed, it will mean some substantial pockets in
secondary buildings. Incentives for new commitments also
have remained stable although there are some early
signs of some reductions at year end. During 2012 these
incentives are expected to fall with continued demand
gradually reducing vacancies.
The Investment market has remained relatively active with
international funds showing strong interest in Brisbane along
with other capital cities in Australia. Good buildings with
realistic expectations of price are selling with interest from
several different sectors.
The Industrial market, especially in the lower investment end
under $5 million remains active with local funds and private
investors. Larger industrial property is harder to move as
investors at this end play a waiting game.
The retail sector was slow in the first half of the year but
showed signs of improvement coming to year end. Any retail
development was mostly at the low end of a smaller nature
in the suburbs with some refurbishment activity in the city.
Cairns, the Sunshine Coast and the Gold Coast have all been
adversely affected by the downturn in overseas tourist
arrivals which has had a knock on effect on the overall
economies of these three centers.
Lack of investor interest in all market sectors in these
centers means prices continue to soften. Investment sales
volumes in general are down and are expected to remain
slow until we see signs of the global economy improving.
Adelaide At A Glance
conversion 0.97 aud = 1 us$ RENT/M 2 /YR US$ RENT/SF/YEAR
low High low High Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
AUD425.00
AUD450.00
AUD250.00
AUD350.00
AUD530.00
AUD520.00
AUD350.00
AUD420.00
$
$
$
$
40.70
43.10
23.94
33.52
$
$
$
$
50.76
49.80
33.52
40.23
2.10%
7.20%
9.80%
N/A
Class A (Prime)
Class B (Secondary)
IndustrIal
AUD 280.00
AUD 100.00
AUD
AUD
350.00
250.00
$
$
26.82
9.58
$
$
33.52
23.94
N/A
N/A
Bulk Warehouse
AUD 80.00 AUD 110.00 $ 7.66 $ 10.54 N/A
Manufacturing
AUD 60.00 AUD 80.00 $ 5.75 $ 7.66 N/A
High Tech/R&D
retaIl
AUD 80.00 AUD 120.00 $ 7.66 $ 11.49 N/A
Downtown
AUD 700.00 AUD 1,500.00 $ 67.04 $ 143.66 N/A
Neighborhood Service Centers
Community Power Center
AUD350.00
N/A
AUD450.00
N/A
$ 33.52
N/A
$ 43.10
N/A
N/A
N/A
Regional Malls
Solus Food Stores
AUD 400.00
N/A
AUD 700.00
N/A
$ 38.31
N/A
$ 67.04
N/A
N/A
N/A
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
AUD 2,500.00 AUD 3,000.00 $10,430,058.43 $ 12,516,070.11
AUD 2,000.00 AUD 3,000.00 $ 8,344,046.74 $ 12,516,070.11
AUD 300.00 AUD 450.00 $ 1,251,607.01 $ 1,877,410.52
AUD 300.00 AUD 400.00 $ 1,251,607.01 $ 1,668,809.35
AUD 800.00 AUD 1,000.00 $ 3,337,618.70 $ 4,172,023.37
AUD 900.00 AUD 1,200.00 $ 3,754,821.03 $ 5,006,428.05
Brisbane At A Glance
conversion 0.97 aud = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR
low High low High Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
Solus Food Stores
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
AUD 550.00 AUD 700.00 $ 52.68 $ 67.04 5.00%
AUD 500.00 AUD 700.00 $ 47.89 $ 67.04 5.00%
AUD 400.00 AUD 450.00 $ 38.31 $ 43.10 9.00%
AUD 375.00 AUD 550.00 $ 35.92 $ 52.68 8.00%
AUD 400.00 AUD 500.00 $ 38.31 $ 47.89 7.00%
AUD 270.00 AUD 370.00 $ 25.86 $ 35.44 9.00%
AUD 100.00 AUD 120.00 $ 9.58 $ 11.49 N/A
AUD 100.00 AUD 110.00 $ 9.58 $ 10.54 N/A
AUD 100.00 AUD 120.00 $ 9.11 $ 11.49 N/A
AUD 1,500.00 AUD 4,000.00 $ 143.66 $ 383.10 N/A
AUD 400.00 AUD 800.00 $ 38.31 $ 76.62 N/A
N/A N/A N/A N/A N/A
AUD 1,100.00 AUD 1,700.00 $ 105.35 $ 162.82 N/A
N/A N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
AUD 100,000.00 AUD 2,000,000.00 $ 417,202,337.08 $ 8,344,046,741.68
N/A N/A N/A N/A
AUD 200,000.00 AUD 1,000,000.00 $ 834,404,674.17 $ 4,172,023,370.84
2012 Global Market Report n www.naiglobal.com 30