Adelaide's northern industrial suburbs are experiencing a boom in values, according to Jones Lang LaSalle Research. JLL Research reveals that northern industrial suburbs located close to the new Adelaide/Darwin rail link and other road and port infrastructure initiatives have seen an increase of almost 50% in land values over the past 5 years.According to Kym Hutchins, Jones Lang LaSalle’s Industrial Manager in Adelaide, investors and tenants in the industrial north encompassing the areas of Cavan, Dry Creek, Gepps Cross, Wingfield, Regency Park, Gillman, Port Adelaide, Osborne and Outer Harbour are particularly optimistic.
“All these suburbs are located along the main rail route, and all have seen strong growth and change in the past five years,” he says.
Jones Lang LaSalle Research shows the Wingfield/Gepps Cross/DryCreek district has significantly increased land values from $35 sqm in the June 1998 quarter to $55 sqm in June 2003. Cavan has also seen similar trends, with increases recorded from $33 sqm recorded in June, 1998 to $50 sqm in the second quarter of this year.Hutchins believes the new infrastructure initiatives of the Adelaide/Darwin rail link and the Port River Expressway are key contributors towards the level of interest in the northern industrial market.The Adelaide industrial market has been increasingly buoyant in the last two years due to the positive fundamentals of low interest rates and lack of supply.Hutchins says has seen an increased level of enquiry from eastern state investors looking for investment opportunities.“The positive optimism is also reflected in the fact that there is increasing interest for speculative development in the leasing sector,” he says.“Office yields sat at between 9.25% and 11.75% in the June quarter with early indications suggesting that the market has firmed during the third quarter by up to 50 basis points, a trend that is likely to continue in the short term.”Adelaide shows good potential in terms of capital growth opportunities. The yields compare favourably to the eastern seaboard, where yields are around 8.5% to 9.5%,” he says.According to Hutchins, the overall outlook for Adelaide is positive, with strengthening of investor demand in the market, being primarily from local investors and a solid outlook particularly in the automotive and wine industries.The Adelaide to Darwin rail link has a business plan that aims to carry 800,000 tonnes of freight a year between Adelaide and Darwin over the first three years, more than double the annual volume which now goes as far as Alice by rail and on to Darwin by road.
