Property Forecasting > Report
The Brisbane industrial market should enjoy strengthening demand
fundamentals over the next few years. With supply contained, stronger demand
should feed through to higher rents, boosting income returns over the next five
years or longer. However, the outlook for capital returns is more uncertain.
Near term, we expect to see further yield firming, taking yields (yet again) to
benchmark lows. But within a five-year horizon, we anticipate that rising bond
rates will put upwards pressure on industrial investment yields, with negative
impacts on capital values. As such, investors are likely to struggle to meet
(current market) hurdle rates of return over a 5-year horizon.
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