According to The Australian Financial Review, Brisbane and Melbourne prime industrial rents are forecast to rise between 16 and 20 per cent over the next five years to compensate for rising land costs and weaker returns, according to the latest forecasts from BIS Oxford Economics.
This "significant turnaround" will follow five years of almost no change in rents with higher prices likely to be supported by rising demand from e-commerce providers and third-party logistics operators, appetite which has helped boost the profits of Amazon landlord Goodman Group and others.
"The prime reason for rising land values is competition for land amongst an increasing number of developers, concentration of land ownership which limits the amount of land offered for sale, and, in the case of Melbourne, planning uncertainty and delays in the rollout of infrastructure needed to service land," report author Christian Schilling said.
As a result of this competition, land values in Brisbane's Trade Coast region increased by 30 per cent over the past two years to almost $500 per square metre and are now back to pre-GFC boom levels.
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