Adelaide's industrial market will continue to hit the radar of an increasing pool of investors in 2016, as buyers look to capitalise on opportunities outside of the eastern seaboard.

CBRE's 2015 Q4 Industrial MarketView reveals investment appetite levels for prime industrial assets across Adelaide have increased, resulting in more investment opportunities being brought to the market.

CBRE Industrial & Logistics Director, David Reid, said: “Solid interest from both local and offshore groups signals an increasing appetite for South Australian industrial assets with their comparatively attractive yields, at a time when eastern seaboard assets have experienced solid yield compression.”

“The current pipeline could present an opportunity for new investors to gain scale quickly by establishing themselves in the South Australian market, or by expanding existing portfolios with safety of secure covenants and long WALEs.”

While industrial sales during the December quarter were 50% below those recorded in 2014, Adelaide is increasingly being seen as an attractive alternative market to invest,” Mr Reid added. 

“Investors who are priced out of the eastern seaboard states are starting to shift their focus to non-core locations, with an increase in enquiry from a number of offshore groups during Q4.”

Supply in Adelaide increased 120% in 2015, compared with 2014, largely driven by the food and beverage sector, which saw new and refurbished distribution centres constructed for businesses entering the Adelaide market. These centres represented 44,000sqm of space or 42% of total supply in 2015.

The low Australian dollar supported industrial markets nationally in 2015, with foreign buyers more than tripling their presence in the market, accounting for 37% of all sales during the year.

Foreign buyers made a strong push for industrial assets during the 12 month period, with 37% of all sales in 2015 to foreign buyers compared with only 10% in 2014.

CBRE's Senior Managing Director, Industrial & Logistics - Pacific, Matt Haddon said Australia's industrial market would continue to hit the radar of an increasing pool of investors in 2016, off the back of the favourable economic climate.

“Australia will continue to be a sought after market on the global stage, with the lower dollar and higher comparative yields on offer making it an increasingly attractive investment destination,” Mr Haddon said.

“We expect foreign interest in industrial and logistics assets to continue strengthening in 2016, with prime assets backed by secure covenants in core locations across the country, to be in most demand.”

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About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world's largest commercial real estate services and investment firm (in terms of 2015 revenue).  The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than  400 offices (excluding affiliates) worldwide.  CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting.  Please visit our website at www.cbre.com.