Focusing on the location of commercial real estate plays a huge role in its overall profitability. Based on this factor, certain cities within Australia are favoured more than others. In a national survey, conducted by PIPA – Property Investment Professionals of Australia, data highlighted this factor even more.
While previously, Sydney and Melbourne were considered to be quite the favourites, the survey revealed that in 2017, Brisbane is the location of choice for many investors.
- 43% of investors consider Brisbane to their favourite location for commercial real estate investment.
- 32% of investors favour Melbourne for investment opportunities in commercial real estate.
- 8% of investors thought Sydney was the best option for commercial real estate investments.
- 6% of investors picked Adelaide for their commercial real estate investments.
- 5% of investors were happy with Perth for investment opportunities in commercial real estate.
A major reason for this shift is largely because of smart investors who are moving away from big cities such as Melbourne and Sydney. These are considered to be cities that are nearing the peaks of their market cycles.
Investing in Brisbane is being looked upon as a better choice because of this factor as well. Moreover, the location has more chances of giving bigger returns on investment. Brisbane is also actively investing in improving the infrastructure of the city, which is working to improve the value of real estate in the city.
3 Major Benefits of Buying Commercial Real Estate in Brisbane
While many investors still prefer Sydney because of the high returns that it can provide, don’t be so quick to overlook Brisbane. With a property market that has been consistent and stable in performance over the years, it is possible for smart investors to have a profitable experience when investing in commercial real estate in Brisbane.
If you are thinking about investing in property in Brisbane, the following are some major benefits you should keep in mind:
Growth in Population
Currently, Brisbane has a high demand for commercial real estate with a population that is consistently growing with each passing year. The total population of Brisbane in 2017 happens to be 2,270,800. Based on the current internal and international migration trends, this number is expected to grow by an additional 662,000 residents by 2031.
Brisbane’s affordable cost of living is also responsible for the internal migration and growth in population that it experiences. The difference in cost of living in comparison to Sydney is extremely high and makes Brisbane affordable for many people. The following is the difference experienced in major expenses in Sydney and Brisbane:
- Sydney’s consumer prices are 11.38% higher than Brisbane’s.
- Sydney’s rent prices are 59.58% higher than Brisbane’s.
- Sydney’s price for groceries is 13.67% higher than Brisbane’s.
In 2015 and 2016, Brisbane received around 10,419 people through internal migration alone. This number is also the highest of any other capital cities in Australia. The growing population means that commercial and residential property will be in high demand. In fact, it is estimated that by 2031, around 280,000 homes will be needed to accommodate the growing population of Brisbane.
Job Creation is on the Rise
Apart from the growing population, job creation in Brisbane is also on the rise. Brisbane has a relatively young workforce and 30% of it is made up of individuals between the ages of 29-30.
To get a closer look at industries that are considered to be employment growth centres in Brisbane and the total number of employment opportunities that they have offered in 2017, take a look at the following:
- Health Care and Social Assistance – 155,300
- Retail Trade – 118,900
- Construction – 109,200
- Scientific, Technical and Professional services – 107,800
- Education and Training – 90,700
Apart from these figures, the National Institute of Economic and Industry Research also forecasts that 350,000 jobs will also be created by 2031. While the cities with the biggest job opportunities still are Sydney and Melbourne, Brisbane isn’t too far behind.
In fact, in 2015, data showed that Brisbane generated more job opportunities for full-time employment than Melbourne. With a rate of 3.1% for full-time employment, Brisbane was only slightly behind Sydney which had a rate of 3.4% for full-time employment opportunities. This growth in job opportunities is also expected to improve demanded for commercial property and higher returns.
Good Economic Growth
Brisbane is all geared to invest in the infrastructure in order to directly improve the liveability as well as the amenities available to the community. This will in turn aid with job creation and improve property demand for the place with ease. By investing in the local infrastructure, Brisbane will not only boost its appeal but also be able to more effectively accommodate the growing number of its population.
Currently, Brisbane’s key projects include the following:
- Queens Wharf Resort and Casino – Completion by 2022
- Expected to bring in 4 million new visitors
- North shore Hamilton – Completion by 2031
- A waterfront renewal project with riverside living, retail and commercial space.
- Metro Transport System – Completion by 2022
- A 21km line with a total of 18 stations.
- Brisbane Airport – 2nd Runway – Completion by 2020
- Expected to boost flights from 227,000 to 360,000
- Expected to improve tourism revenue by doubling it to $7.6 billion.
- Brisbane Quarter – Completion by 2019
- First purpose built hotel in Australia
- 40 levels of office space
Completion of all these projects is expected to boost the returns on investment, property prices and more in Brisbane. All in all, the city is currently geared to experience larger growth and will be among the top performing cities in Australia soon.
Investing in commercial real estate in Brisbane is better done as quickly as possible. Currently prices for commercial real estate are low and affordable and they are expected to grow as demand for property keeps growing as well. Investing in Brisbane commercial real estate offers you the chance to capitalize on the steady growth that the marketplace has to offer and keep experiencing better returns on investment with each passing year.
Overall Capacity of the Warehouse
The capacity of the cold storage warehouse can allow you to store large amounts of temperature sensitive products without any worries. If you have an extremely large warehouse that you use for cold storage, you can also divide it into different portions. This option allows you to store various different products, at different temperatures, within the same warehouse.
In this manner, you can cut down costs as well as ensure that your warehouse is being utilized to maximum capacity. With a few racking pallets as well as mezzanine floors introduced into the cold storage warehouse, you can effectively ensure that you are able to utilize the overall capacity of the warehouse and save money in the long run as well.