adelaide industrial research forecast report second half 2012

ADELAIDE INDUSTRIALReseaRch & FoRecast RepoRt

www.colliers.com.au/research

Market Consolidates for Expansion in 2013Overall more than 200,000m² of industrial floor space has been leased across Adelaide’s industrial markets in 2012. Tenant enquiry has been solid throughout the year and the Northern markets continue to be the most popular. Almost 80% of all leasing transactions this year have occurred in the Inner and Outer North. Generally rents are stable and incentives are holding.

Adelaide’s pre-lease market remains active. Close to 50,000m² has been pre-leased this year and there are a number of tenant requirements yet to be fulfilled. Recent pre-lease commitments include Cameron Interstate, Electrolux, Global Pumps Inc, Spotless Group and Australian Independent Glass.

Year to date the total value of transactions is estimated to be $180 million. Almost 45% of these transactions occurred in the Inner Northern precinct. Major investment sale activity ($5M+) has also improved on 2011 and transactional activity in the lower price bracket remains steady. Owner occupiers and self-managed super funds are increasingly active in this segment.

Prime market yields have stabilised and are now holding firm between 8.0% and 8.5%. Largely this has been driven by the sales of some significant properties in the Outer North, including properties leased to Nick Scali on a yield of 8.0%, Kimberly-Clark on a yield of 8.6% and Rocla on a yield of 8.0%. These sales together with the sale of 244 Eastern Parade at Gillman (CHEP) on a yield of 8.3% point towards Prime yields compressing at least 25 basis points on 2011 and suggest 2013 will also benefit.

MaRket IndIcatoRs FoRecast - 6 Months

oveRall peRFoRMance

new supply

tenant deMand

IncentIves

Face Rents /

capItal values /

yIelds /

land values

SECOND HALF 2012 | INDUSTRIAL

key hIghlIghts

•Year to date 200,000m² of industrial floor space has been leased.

•The Inner North continues to dominate the majority leasing transactional activity.

•Prime market yields are between 8.0% and 8.5%.

31 Dunorlan Road, EdwardstownBuilt less than a year ago, the property is immaculately presented with modern features providing significant corporate appeal. Considered a Premium graded facility and the last remaining of this quality available to lease in this precinct, this high clearance warehouse/showroom and corporate office provides approximately 690m².

adelaIde IndustRIal MaRket IndIcatoRs

Region gradeaverage net Face Rents ($/m2pa)

average Incentives

average capital values ($/m2)

average Market yield*

average land values

low hIgh low hIgh low hIgh low hIgh low hIgh

outeR noRth

Prime $85 $110 10% 20% $900 $1,300 8.00% 9.00%$50 $100

Secondary $50 $65 10% 20% $500 $800 9.00% 9.75%

InneR noRth

Prime $100 $145 10% 20% $1,400 $1,900 7.75% 8.50%$130 $250

Secondary $65 $90 10% 20% $900 $1,300 8.50% 9.50%

InneR west

Prime $110 $170 0% 15% $1,500 $2,200 6.75% 7.25%$400 $500

Secondary $65 $110 10% 20% $1,100 $1,500 7.50% 8.50%

InneR south

Prime $105 $150 10% 15% $1,500 $1,950 6.75% 7.75%$380 $500

Secondary $65 $100 10% 15% $900 $1,400 7.75% 9.00%

outeR south

Prime $70 $90 10% 15% $1,000 $1,200 9.00% 9.75%$80 $135

Secondary $40 $85 10% 15% $550 $900 9.75% 10.50%

eastPrime $120 $180 0% 5% $2,000 $3,000 6.50% 7.50%

$700 $1,000Secondary $65 $110 0% 5% $1,500 $2,000 7.50% 8.25%

* Equivalent Reversionary Yield Data correct as of Q3 2012Source: Colliers International Research

Economic UpdatesolId natIonal econoMIc gRowthThe June Quarter 2012 Australian Bureau of Statistics (ABS) Gross Domestic Product (GDP) data, showed in seasonally adjusted terms, GDP increased 0.6% during Q2 2012. Although slower than the strong result of 1.4% in Q1 2012, through-the-year GDP growth was a solid 3.7%. Deloitte Access Economics expect annual GDP growth to be 3.0% in 2012-13 and to rise to 3.4% in 2013-14 before easing to 3.3% in 2014-15.

uneMployMent Rate steady The unemployment rate remains at the healthy level of 5.2% (trend) where it has settled over the past four months. However, monthly full-time jobs growth has disappeared. Over the 12 months to August 2012, full-time employment increased by 27,900 jobs and while this is the largest increase over a 12 month period since October 2011 it is well below trend.

consuMeR pRIces settleThe latest inflation data from the ABS shows that annual headline inflation rose just 1.2% during the 12 months to June 2012, down compared with a rise of 1.6% through the year to March 2012. This saw the Consumer Price Index (CPI) grow by 0.5% during the quarter and ensures that the inflation rate remains well below the Reserve Bank of Australia (RBA) target range of 2% to 3%.

InteRest Rates Enough evidence showing that the national economy is growing at around trend without excessive inflationary pressures convinced the RBA Board to keep the official cash rate at 3.25% in November. The Bank pointed out further effects of actions already taken to ease monetary policy can be expected over time.

austRalIan dollaR After fluctuating around parity with the $US over the first half of 2012, the recent round of quantitative easing (QE3) announced by the US Federal Reserve has been accompanied by trade in the Australian Dollar at between $US1.02 and $US1.03.

Regency Park

StepneyMile End

Beverley

Woodville

Port Adelaide

Outer Harbor

Green Fields

Burton

North Plympton

Edwardstown

Clovelly Park

Lonsdale

Pooraka

Cavan

Gillman

Salisbury South

Edinburgh

Elizabeth West

EastInner West

Inner South

Outer South

Outer North

Adelaide CBD

Inner NorthGrand Junction Road

North

East

RoadSouth Road

Port Road

South Eastern Freeway

Southern Expressway

South Road

Port Wake�eld Road

Salis

bury

Highw

ay

Main

North

Roa

d

Port River Expre ssway

(PRE

XY)

Wing�eld

Direk

adelaIde IndustRIal MaRkets

collIeRs InteRnatIonal | p. 2

RESEARCH & FORECAST REPORT | SECOND HALF 2012 | INDUSTRIAL | ADELAIDE

Key Market Indicatorsgdp v gsp•According to the ABS, in seasonally

adjusted terms, through the year GDP growth was 3.7%.

•According to Deloitte Access Economics September 2012 Business Outlook, GDP growth of 3.0% is forecast for 2012-13. Growth is expected trend marginally upwards in 2013-14 with Deloitte Access Economics forecasting GDP growth to be 3.2%.

•South Australian Gross State Product (GSP) growth is forecast to be 2.4% in 2011-12 and forecast to trend downwards in 2012-13, with Deloitte Access Economics forecasting SA GSP to be 1.0%.

IndustRIal constRuctIon•There is approximately 45,000m² of industrial

floor space currently under construction within Adelaide’s industrial precincts. These projects have expected completion dates ranging from the last quarter of 2012 to throughout 2013.

•There is currently approximately 31,841m² of known industrial projects listed with development approval.

•Development Applications have been submitted on a number of projects however the building area component is not known.

IMpoRt contaIneR tRade•Container trade through Flinders Ports

increased by 5.0% in the month to July 2012 with a total container volume through Port Adelaide being 22,511 TEUs.

•Container imports were 9,998 TEUs in July 2012, up 0.1% from June 2012.

•On a year on year basis, container imports are up nearly 43.5% on the same time last year.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

Jan-

07

Apr

-07

Jul-0

7

Oct

-07

Jan-

08

Apr

-08

Jul-0

8

Oct

-08

Jan-

09

Apr

-09

Jul-0

9

Oct

-09

Jan-

10

Apr

-10

Jul-1

0

Oct

-10

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12

Apr

-12

Jul-1

2

Num

ber o

f TE

U's

(Tw

enty

-foot

Equ

ival

ent U

nits

)

Imports 5 year average 3 Month Trend

FlIndeRs poRts - IMpoRt contaIneR tRade In teu’s

Source: Flinders Ports / Colliers International Research

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Ann

ual G

row

th (%

)

South Australia Gross State Product Australian Gross Domestic Product

austRalIan gdp vs south austRalIan gsp

Source: Deloitte Access Economics / Colliers International Research

• Forecast

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Development Approval Contract Let Construction

adelaIde IndustRIal developMent pIpelIne

Source: Colliers International Research

Floo

rspa

ce(m

2 )



Outer NorthRents •Overall rents have remained relatively stable

during the last six months with any increases a result of annual rent reviews.

•Prime net face rents average between $85 and $110/m² pa and Secondary net face rents between $50 and $65/m² pa.

•Incentives average between 10% and 20%.

leasIng actIvIty•In July 2012, it was confirmed that Cameron

Interstate had pre-committed to lease a new facility at Edinburgh Parks. The 6,200m² purpose-built logistics and freight transfer facility will be developed by owner and developer Commercial & General. The facility is expected to incorporate high clearance warehousing corporate offices and a large external concrete hardstand area. The facility is expected to be completed later next year.

•Commercial & General also redeveloped the circa 35,000m² distribution facility leased to Coca-Cola Amatil (CCA) in December 2011. Located on the corner of Frost and Cross Keys Road in Salisbury South, the former site of Bridgestone Australia has been refurbished. CCA recently relocated from their existing site at Gillman.

•In April 2012, GTS Freight Management leased a near new office warehouse facility located at 4 Gidgie Court, Edinburgh Parks. The facility, which comprises circa 2,453m², is situated on a site of 15,440m². It has been leased on a five year term at an estimated rate of $100/m².

sales actIvIty•In June 2012, 360 Capital confirmed it had

acquired a portfolio of four properties from Walker Corporation, including one in South Australia. All properties are recently completed design and construct properties and 100% leased with long lease terms to major tenants. Yields for all properties are within the 8.0% range. The sale included two properties in Queensland, The Reject Shop distribution facility and Australian Pharmaceutical Industries (API), both within the Citiswich Business Park in Ipswich, a Grace Group warehouse and storage facility at Hume in the Australian Capital Territory and a Kimberly-Clark distribution facility at Direk in South Australia.

•The sale of the South Australian property leased to Kimberly-Clark, 9-13 Caribou Drive, Direk, reflected an individual sale price of $9.2 million and a market yield of 8.63%.

•In August 2012, Walker Corporation sold Lot 22 Mirage Road, Direk within Vicinity Industrial Base to Bonney Welding for $892,000, reflecting a land price of $87.50/m². Emmett Property will develop a 3,300m² warehouse/office facility on the site which covers approximately 10,200m².

•In July 2012, Buttrose Earthmovers also bought a site from Walker Corporation for $336,200. The 3,362m² site is located within Vicinity Industrial Base at 10 Caribou Drive, Direk.

•In September 2012, developer Proactive Property acquired a 4,820m² site at Mirage Road, Direk from Walker Corporation for $457,900, reflecting a land price of $95/m². Also located with Vicinity Industrial Base, a development application has recently been submitted to build a 1,500m² warehouse and office facility.

yIelds •Prime market yields range between 8.00%

and 9.00% and Secondary market yields between 9.00% and 9.75%.

•Overall yields have firmed at least 25 basis points in the last six months.

•The newly constructed property leased to Nick Scali at 9 Mirage Road, Direk sold in January 2012 on a market yield of 8.0% and most recently the Kimberly-Clark facility at Direk sold on a market yield of 8.63%.

•Prime capital values range between $900 and $1,300/m² and Secondary capital values $500 to $800/m².

9-13 Caribou Drive, DirekKimberly-Clark distribution facility recently sold on a market yield of 8.63%. Image is an aerial view of Edinburgh Parks.



Inner NorthRents

•The Inner Northern precinct continues to dominate the majority leasing transactional activity across Adelaide.

•Prime net rents currently range between $100 and $145/m² pa and Secondary net rents between $65 and $90/m² pa.


leasIng actIvIty

•In February 2012, Interlloy signed a long term lease for 1 William Circuit at Pooraka. The 4,385m² property had formerly been occupied by Bohler Uddeholm (Bohler Steel) who sold it late last year.

•Australand acquired the Electrolux 84,000m² site at 19 Pope Street Beverley in an off-market transaction at the end of 2011. A new facility is under construction for Electrolux, who pre-committed to lease a new purpose-built 25,500m² facility from Australand. The lease is for 12 years at an estimated net rent of $87/m². The building is expected to be completed next year. The new building will be situated on a site area of around 40,000m², with the remainder of the site is likely to be offered as design and construct leasing opportunities.

•Earlier this year Australian Independent Glass pre-committed to lease a new facility at Pooraka Enterprise Park. The 2,700m² building, which is located at 35-37 Maxwell Road, Pooraka, was completed in July 2012.

•In June 2012, Cospak signed a five year lease for Wingfield Distribution Centre at 30-32 Rosberg Road, Wingfield. The property comprises two separate buildings of modern construction which are connected by an undercover canopy. The property has a combined gross lettable area of approximately 6,787m² and a site area of approximately 12,688m².

•In August 2012, KW Doggett re-committed to lease a 3,500m² warehouse facility located within Goldsborough Industrial Estate. The property is situated at Unit 3, 29 Produce Lane, Pooraka and has been leased for three years. It is estimated the property has a site area of 9,000m².

•It was recently reported that Spotless Group had pre-leased a purpose-built facility at 2-32 Pedder Crescent, Dudley Park. The 4,400m² building is currently under construction and is expected to be completed in December 2012.

sales actIvIty

•In June 2012, 16-20 Johansson Road, Wingfield sold for $9.5 million on an initial yield of 11.6%. Receivers and Managers were appointed in 2011. It sold fully leased to CMA Recycling who has been in occupation for some time. The property comprises modern office warehousing of approximately 10,866m² and has a site area of circa 60,570m².

•In June 2012, it was confirmed that 360 Capital had finalised settlement of the sale of 244 Eastern Parade, Gillman from Becton for $5.65 million. The sale price represents an market yield of 9.62%. The property is fully leased to Chep Australia Ltd until December 2014. Situated on a corner site of 45,000m² approximately, improvements include an office factory of approximately 7,915m².

•203-215 Hanson Road, Athol Park sold with vacant possession in July 2012 for $4.68 million. The sale price represents an imputed market yield of 11.6%. The sale follows the appointment of Receivers and Managers late last year. It was previously occupied by San Marino Smallgoods who purchased the property in 2006. Improvements include factories and warehousing plus offices with an approximate building area of 6,856m². The site is circa 13,890m². It was purchased by the Master Butchers Co-operative.

•In October 2012, settlement of 589 Grand Junction Road, Gepps Cross was finalised for $8 million. The property was formerly known as Gepps Cross Girls High School and has been sold with vacant possession to Cavpower who has development approval to redevelop the site. The area of the site is approximately 59,530m².

yIelds

•Having compressed in the first half of 2012, overall yields are now holding stable.

•Prime market yields currently range between 7.75% and 8.50% and Secondary market yields between 8.50% and 9.50%.

•Prime capital values range between $1,450 and $1,900/m² and Secondary capital values $900 to $1,300/m².

15-23 Whicker Road, GillmanIn July 2012, ACI Glass leased a 32,000m² warehouse at 15-23 Whicker Road, Gillman. At the end of June 2012, Elders vacated the large circa 70,000m² property. The majority of the remaining tenancies have since been leased.



WestRents•Prime net rents currently range between

$110-$170/m² pa and Secondary net rents between $65-$110/m² pa.

•Incentives average between 0% and 15% for Prime and 10% and 20% for Secondary space.

leasIng actIvIty•In August 2012, Unit H, 5 Butler Boulevard,

Adelaide Airport was leased to Ericsson Australia Pty Limited. The building, which is owned by Australand, has multiple tenancies. Unit H is approximately 1,222m² and has been leased for five years with options.

•In May 2012, the State Government (Department of Health) leased 960m² at 81-83 Stephens Avenue, Torrensville. The modern office warehouse building has been initially been leased for seven years at an estimated rate of $141/m² net.

•In September 2012, Love Energy signed a five year lease for 2-4 Adam Street, Hindmarsh. The property had previously been occupied by Diageo who has since relocated. The near new office warehouse comprises approximately 1,485m² and has been leased to Love Energy for around $155/m² net.

sales actIvIty•CPT Manager Limited (Centro Properties

Group) property at 404-450 Findon Road, Kidman Park has now sold. The property,

which is fully leased to Metcash Trading Limited, sold to the owner of Cheap as Chips in June 2012 for $35.110 million. The sale price reflects an initial yield of 15.46%. The property has a total building area of 58,794m² and a site area of 119,171m². Cheap as Chips is likely to occupy the site following the expiry of the current lease to Metcash in December 2015.

•In February 46 First Street, Brompton sold with vacant possession for $950,000. The sale price represents an imputed market yield of 7.90%. The property comprises an office warehouse facility with a building area of approximately 876m² situated on a corner site with an area of 1,382m². It was purchased by private investor.

•In July 2012. 17-19 Commercial Street and 49 Barwell Avenue, Marleston sold with vacant possession for $4.1 million. The property was sold by the Commissioner of Highways to an owner occupier. Emmett Property will redevelop the site for Hair Care Australia. The site has development approval to construct a 5,800m² office and warehouse facility. The development is expected to completed by the end of 2013.

yIelds•Market yields have remained stable since the

start of 2012.

•Currently Prime market yields range 6.75% and 7.25% and Secondary market yields between 7.75% and 8.50%.

Outer SouthRents•Prime net face rents range from $70 to 90/m² pa

and Secondary net face rents $40 to $85/m² pa.


sales actIvIty•There have been a limited number of sale

transactions in the precinct during 2012.

•In March 2012, 12 Kitawah Street, Lonsdale sold with vacant possession for $759,000. Includes warehousing plus offices of approximately 1,015m² on a site of 2,027m². The sale price represents a rate of $747/m².

•In June 2012, 32 Heath Street, Lonsdale sold with vacant possession for $1.2 million. Improvements include high clearance warehousing and offices of circa 1,436m² on site of 6,431m². It was purchased by a private investor. The sale price represents a rate of $835/m².

yIelds•Prime market yields range from 9.00% to

9.75% and Secondary market yields from 9.75% to 10.50%.

1 Butler Drive, HendonIn August 2012, 1 Butler Drive, Hendon sold for $1.67 million on a market yield of 13.76%. The property sold fully leased to Hendon Semiconductors Pty Ltd. Improvements include a 4,104m² office and warehouse and the site area is approximately 8,213m².



Inner SouthRents•Prime net face rents range between $105 and

$150/m² pa and Secondary net rents range between $65 and $100/m² pa.


leasIng actIvIty•In May 2012, Global Pumps Inc pre-committed

to lease a purpose-built facility located at 6 (10-12) Selgar Avenue, Clovelly Park. The development will comprise approximately 4,500m² of improvements, including a two storey office and distribution centre and will be situated on a site area of 11,690m². Development approval has recently been granted and construction is expected to get underway later this year. It is expected to be complete by December 2013.

sales actIvIty•In June 2012, 1102-1106 South Road,

Edwardstown sold with vacant possession for $4.75 million. Formerly occupied by Southlands Mitsubishi, the site includes improvements of circa 2,464m² and has a land area of 10,160m². The property is currently for lease as design and construct.

•31 Bennet Avenue, Melrose Park sold with vacant possession in March 2012 for $1.175 million. The sale price represents an imputed market yield of 7.11%. Comprises high clearance warehousing plus offices of approximately 460m² on a site of 1,307m².

yIelds•There has been limited major investment

activity, as such yields remain unchanged.

•Prime market yields average between 6.75% and 7.75%. Secondary market yields between 7.75% and 9.00%.

EastRents•Prime net rents range from $120 to $180/m²

pa and Secondary net rents remain within the range of $65 to $110/m² pa.

•Incentives averaging 0% to 5% across both grades in this precinct.

sales actIvIty•In May 2012, the sale and leaseback of 76 Magill

Road and Stephen Street, Norwood was finalised for $15 million, on a market yield of 6.5%. The property has been occupied by Caroma Industries, a fully owned subsidiary of GWA Group Limited. GWA Group Limited announced in February 2012 that a conditional contract had been entered into, subject to environmental assessment and other conditions. Caroma agreed to leaseback the site until a new facility is available more suited to their requirements. The total site covers approximately 19,920m² and includes improvements of 13,442m². The Norwood site sold along with a non-core property in Coburg, Victoria under a sale and leaseback arrangement for a combined price of $19 million.

•In March 2012, 18 Chapel Street, Norwood sold with vacant possession for $640,000. The sale price represents a rate of $1,617/m². The property includes warehousing of 383m² and is on a site of 560m². It has been purchased by an owner occupier.

•48 Henry Street, Stepney sold at auction in April 2012 for $755,000. The property sold with vacant possession and the sale price reflects a rate of $2,007/m². Includes a high clearance warehouse and office. The sale was settled in June 2012 to an owner occupier.

76 Magill Road and Stephen Street, NorwoodPurchased by the Urban Renewal Authority in May 2012 for $15 million under a sale and leaseback arrangement.



New Supply PipelinedevelopMent update

address suburb area (m2) status estimated completion project type comments

Outer North

13 Mirage Road Direk 7,729 U/C 2012 New Development New office/warehouse facility for Cahill Transport.

32 Mirage Road Direk 3,300Development

Approval2013 New Development New office/warehouse facility for Bonney Welding.

12-20 Orion Road Direk 1,500Development

Approval2013 New Development New warehouse / distribution facility.

Inner North

10 Myer Court Beverley 2,842 U/C 2012 New Development Construct warehouse with associated offices.

19 Pope Street Beverley 25,500 U/C 2013 New Development New warehouse plus offices for Electrolux.

5-7 Myer Court Beverley 1,744 U/C 2013 New Development Two office warehouse units.

2-32 Pedder Crescent Dudley Park 4,400 U/C 2013 New DevelopmentConstruction of new warehouse facility for Spotless Group.

18 Myer Court Beverley 871Development

Approval2013 New Development Construction of warehouse.

589 Grand Junction Road Gepps Cross 5,400Development

Approval2013 New Development

Demolition of six buildings on site and construc-tion of new workshop and associated buildings plus hardstand area for Cavill Power.

60 Grand Junction Road Kilburn 2,400Development

Approval2013 New Development Construct new warehouse/distribution centre.

1-3 Islington Court Dudley Park n/aDevelopment

Approval2013 New Development Construction of three warehouse units.

60-66 Pym Street Dudley Park n/aDevelopment Application

2013 New Development Construction of new warehouse and office facility.

164-168 Cavan Road Dry Creek Site 5 ha Planning 2015 Redevelopment Proposed redevelopment of site for San Remo.

West

387-391 South Road Mile End South 1,500 U/C 2013 New DevelopmentConstruction of new warehouse and two level office building.

47-49 London Road Mile End 2,700 U/C 2013 Redevelopment Extension of Allied Mills warehouse.

17-19 Commercial Street and 49 Barwell Avenue

Marleston 5,800Development

Approval2013 New Development Construct office and associated warehousing.

South

13-15 Deloraine Road Edwardstown 1,089Development

Approval2013 New Development New warehouse and office.

6 (10-12) Selgar Avenue Clovelly Park 4,500Development

Approval2013 New Development

Construct two storey office and distribution centre for Global Pumps Inc.

32-42 Woodlands Terrace

Edwardstown n/aDevelopment Application

2013 New Development Construction of six tenancy warehouse units.




leasIng actIvIty

address suburb start date gla (m2) net Face Rent ($/m2) tenant

East

9b Nelson Street Stepney Jul-12 180 $133 Pack Send Norwood

41 Magill Road Stepney Feb-12 1,131 $198 ProAV Solutions (formerly AV Central)

Inner North

2-32 Pedder Crescent Dudley Park Dec-12 4,400 n/a Spotless Group

19 Pope Street Beverley Sep-12 25,500 $87 Electrolux

U3, 29 Produce Lane Pooraka Aug-12 3,500 $102 KW Doggett

15-23 Whicker Road Gillman Jul-12 32,000 $45 ACI Glass

35-37 Maxwell Road Pooraka Jul-12 2,700 $120 Australian Independent Glass Pty Ltd

30-32 Rosberg Road Wingfield Jun-12 6,787 $85 Cospak Pty Ltd

Unit 3, 2 Lafitte Road Wingfield May-12 600 $75 Shred-X

8-12 George Street Green Fields Apr-12 6,516 $54 NBNCo Limited

334-338 Cormack Road Wingfield Apr-12 3,487 $113 Corporate Express

7 Naweena Road Pooraka Feb-12 4,385 $104 Interlloy Pty Ltd

Outer North

4 Gidgie Court Edinburgh Parks Apr-12 2,453 $101 GTS Freight Management

Lot 303 Kaurna Avenue Edinburgh Parks Feb-12 5,360 $47 Ausco Modular Pty Limted

Vicinity Industrial Estate, Mirage Road Direk Jan-12 3,000 $90 Nick Scali

Inner South

6 (10-12) Selgar Avenue Clovelly Park May-12 4,500 n/a Global Pumps Inc

146A Daws Road Melrose Park Feb-12 1,586 $57 Australian Natural Therapy Co

Inner West

2-4 Adam Street Hindmarsh Sep-12 1,486 $155 Love Energy

Unit H, 5 Butler Boulevard Adelaide Airport Aug-12 1,222 n/a Ericsson Australia Pty Limited

78 Hughes Street Mile End Aug-12 500 $110 Pro Video

20 Cawthorne Street Thebarton Jul-12 500 $80 JamJar Pty Ltd

81-83 Stephens Avenue Torrensville May-12 960 $141 State Government (Department of Health)


Recent Market Transaction Activity



Recent Market Transaction Activity InvestMent sales actIvIty

address suburb sale date sale price gla (m2)

capital value ($/m2)

Market yield* vendor purchaser

East

76 Magill Road & Stephen Street Norwood May-12 $15,000,000 13,442 $1,116 6.50% GWA Group LimitedState Government (Urban Renewal Authority)

Inner North16-20 Johansson Road Wingfield Jun-12 $9,500,000 10,866 $874 1 11.57% 2 WMR Investments Pty Ltd B Russo Nominees Pty Ltd

244 Eastern Parade Gillman Jun-12 $5,650,000 7,915 $714 9.62%Becton Investment Management (360 Capital Industrial Portfolio)

Jomarie Pty Ltd

29-31 Goodall Avenue Kilkenny Mar-12 $1,980,000 2,682 $738 8.54% FGP Co Pty Ltd ACN 150 653 875 Pty Ltd

31-41 Kapara Road Gillman Jan-12 $3,900,000 3,916 $996 9.58% Wadi Pty Ltd Undisclosed

Outer North9 Mirage Road Direk Jan-12 $3,403,196 3,000 $1,134 7.98% Sem Group of Companies Private

Inner West1 Butler Drive Hendon Aug-12 $1,670,000 4,104 $407 13.76% IES Services Pty Ltd Acacia Drive Pty Ltd

404-450 Findon Road Kidman Park Jun-12 $35,110,000 58,794 $597 1 15.46% 2 CPT Manager Limited In For A Pound Pty Ltd

Unit 1, 138-140 Ashley Street Underdale May-12 $766,000 692 $1,107 1 7.96% 2 Austral Ventures Pty Ltd Private

Source: Colliers International Research* Yields quoted are equivalent revisionary yields.1 Capital value is indicative of approximate gross building area, but has not been confirmed. 2 Yield is indicative of approximate net income, however has not been confirmed.

land/developMent sales actIvIty

address suburb sale date sale price

site area (m2)

price ($/m2) vendor purchaser

Inner North

25 Staite Street Wingfield Aug-12 $260,000 920 $282 3 Private Private

Outer NorthMirage Road Direk Sep-12 $457,900 4,820 $95 3 Walker Direk Development Pty Ltd Proactive Property Pty Ltd

Lot 22 Mirage Road Direk Aug-12 $892,500 10,200 $87 3 Walker Direk Development Pty Ltd Bonney Property Investments Pty Ltd

10 Caribou Drive Direk Jul-12 $336,200 3,362 $100 3 Walker Direk Development Pty Ltd Carjoda Pty Ltd

Inner West17-19 Commercial Street & 49 Barwell Avenue

Marleston Jul-12 $4,100,000 16,677 $246 3 Commissioner of Highways Gauvin Enterprises Pty Ltd

Source: Colliers International Research3 Price is indicative of approximate site area, however has not been confirmed.



Recent Market Transaction Activity vacant possessIon sales actIvIty

address suburb sale date sale price gla (m2)

capital value ($/m2)

Market yield* vendor purchaser

East

57 Beulah Road Norwood Jan-12 $1,186,000 653 $1,816 1 n/a Private Private

Inner North

7 Charles StreetAllenby Gardens

Aug-12 $360,000 230 $1,565 1 VP Private Private

475 Grand Junction Road Wingfield Aug-12 $790,500 1,547 $381 1 VPG E Harrison (Holdings) Pty Ltd

M & J Mucha Pty Ltd

3 Bollen Street Kilkenny Aug-12 $1,155,000 1,560 $740 1 VPTag Property Nominees Pty Ltd

J Codling Investments Pty Ltd

203-215 Hanson Road Athol Park Jul-12 $4,680,000 6,856 $683 1 VP A & E Marino P/L Master Butchers Co-Op Ltd

62-66 Grand Junction Road Kilburn Jul-12 $5,000,000 9,690 $515 1 VP Coventry Group Ltd Benson Land Pty Ltd

5-7 Gumbowie Avenue Edwardstown Jun-12 $990,000 1,259 $786 1 VP Kerton Brothers Pty LtdArentz & KKG Engineering Pty Ltd

55 Wodonga Street Beverley May-12 $815,000 730 $1,116 1 VP Austral Ventures Pty Ltd Kimen Pty Ltd

483-485 South Road Regency Park May-12 $3,000,000 2,706 $1,108 1 VP Samaras Nominees Pty Ltd Jozef Franco Pty Ltd

14 Fifth Street Wingfield Mar-12 $260,000 204 $1,274 1 VP Private Private

471-473 South Road Regency Park Feb-12 $2,100,000 2,176 $965 1 VP PrivateHM Australia Holdings Pty Ltd

Inner South

58 Deeds RoadNorth

PlymptonJul-12 $1,457,500 1,262 $1,169 1 VP Private Marlborough Group Pty Ltd

1102-1106 South Road Edwardstown Jun-12 $4,750,000 2,464 $1,928 1 VP Yeomans Nominees Pty Ltd AB & SM Rawlings Pty Ltd

31 Bennet Avenue Melrose Park Mar-12 $1,175,000 824 $1,426 1 7.11% PrivateLincoln Hills Securities Pty Ltd

Outer South

32 Heath Street Lonsdale Jun-12 $1,200,000 1,436 $835 1 VP Peter Pham Pty Ltd Private

12 Kitawah Street Lonsdale May-12 $759,000 1,015 $747 1 VP PrivateDerek Gee Installations Pty Ltd

Inner West

57 Hampton Road Keswick May-12 $869,000 530 $1,639 1 VP Rayke Nominees Pty Ltd C & J Mahoney Pty Ltd

11-13 West Thebarton Road Thebarton Apr-12 $2,950,000 2,200 $1,340 1 VP Anrose Nominees Pty LtdWestside Properties (SA) Pty Ltd

46 First Street Brompton Feb-12 $950,000 876 $1,084 7.90% SCW Pty Ltd Whim Pty Ltd

Source: Colliers International Research* Yields quoted are equivalent reversionary yields. 1 Capital value is indicative of approximate gross building area, but has not been confirmed.



Colliers International does not give any warranty in relation to the accuracy of the information contained in this report. If you intend to rely upon the information contained herein, you must take note that the information, figures and projections have been provided by various sources and have not been verified by us. We have no belief one way or the other in relation to the accuracy of such information, figures and projections.

Colliers International will not be liable for any loss or damage resulting from any statement, figure, calculation or any other information that you rely upon that is contained in the material. COPYRIGHT - Colliers International 2012.

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InFRastRuctuRe update

pRoJect locatIon statuscoMpletIon

datecoMMents

Road

South Road Superway ALL U/C 2013Elevated road bridge providing multiple lanes in each direction above the existing South Road alignment.

Southern Expressway - duplication South U/C 2014

Duplication of 22 km of the Southern Expressway (9 road bridges and 5 pedestrian bridges).

Adelaide's north-south corridor ALL Ongoing Ongoing

A series of non-stop road links connecting the north and south, providing a 78 kilometre corridor. Comprises four road links: Northern Expressway, Northern Connector, South Road upgrades, Southern Expressway.

Northern Connector Outer North Pending 2016-2017

Construction of an expressway standard road in a new corridor between the interchange connection of Port Wakefield Road and the Northern Expressway and Salisbury Highway (a distance of approximately 14 kilometres).

Source: DMITRE/Colliers International Research

OutlookPrime yields are holding steady between 8.0% and 8.5% and this range is unlikely to change over the remainder of 2012. Expect modest yield compression in 2013, most likely from Q2-2013 when transactional activity for the year is well underway. Market indicators are in a stage of consolidation, with the recent stabilising of rents and yields supporting this trend. However, 2013 should see some expansion in values, especially in traditional core precincts. At the same time, the Outer North is likely standout in 2013. There has already been some growth here and this trend should continue.

There is currently a positive spread between the cost of funds and the return on investment property. The market hasn’t seen this since 2007. As the economic outlook continues to improve, more investors will be keen to act and increase holdings in the Adelaide industrial market. Expect the volume of institutional acquisitions to increase substantially in 2013 and continue into 2014. Further, as the high profile design and construct projects come to fruition, there will be an increase in the number of investment assets which offer significant appeal to investors wanting to diversify or increase their portfolio. Consider the recent pre-lease commitments. On the whole, the investment market will be well placed to meet the increasing demand from motivated buyers.

The leasing market has remained solid throughout 2012. Expect a strong finish to the year. This momentum will continue into 2013. Demand will remain high and with a number of major tenants currently in the market with requirements unfulfilled, expect further pre-lease activity. While the last quarter of 2012 is not likely to see any major changes to rental ranges, there will be growth in 2013.

The outlook is positive. Sale volumes will increase, modest yield compression is likely and rental growth will return.

Infrastructure Update


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adelaide industrial research forecast report second half 2012

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