Queensland’s looming shortage of industrial land is being compounded by delays in connecting power, water and other essential services to new developments.
McCullough Robertson partner and Property Council of Australia Industrial and Logistics Committee chair, Marianne Lloyd-Morgan, said simply identifying more land for industrial development would not fully solve the supply problem.
She said developers were already encountering significant delays connecting completed industrial sites to the electricity grid.
“They’re working on their development projects, and then the site sometimes doesn’t actually get connected to the grid for well over 12 months or more,” Ms Lloyd-Morgan said.
“When this happens, they have to operate on a battery or a generator until the services arrive.”
The delays are adding another layer to concerns over the supply of development-ready industrial land in South-East Queensland, despite the sector continuing to perform strongly.
Shortages could undermine the boom
Ms Lloyd-Morgan, whose legal practice includes all aspects of acquisitions and disposals, leasing and property development, has been on the Property Council’s industrial and logistics committee for almost six years and was elected chair two years ago. She is also Head of McR Private at McCullough Robertson.
She said research commissioned by the Property Council had helped quantify a problem the industry had been warning about for some time.
“Industrial land is performing exceptionally well,” she said. “However, the critical takeaway is that this momentum is unsustainable if we don’t make some changes to open up more land and ensure that land can be connected to services quickly enough.
“They keep talking about how much land is available, but when you actually deep dive into it, these areas don’t have the necessary infrastructure.”
Queensland performing well
Ms Lloyd-Morgan said Queensland’s industrial land sector was performing well compared with other states, but the supply of suitable industrial land was being rapidly depleted.
“We’re fortunate to be in a strong position compared to other states that are currently struggling in this area,” she said.
“However, we are on track to exhaust our accessible industrial land. If we don’t act soon, it will create a crisis for our operations.”
The Property Council has provided feedback on the South-East Queensland regional industrial land framework and strategy, including concerns that land identified for future industrial development was not necessarily ready to be developed.
In some cases, sites lacked the utilities, infrastructure and nearby workforce needed to make projects viable.
The problem was also becoming apparent when investors assessed potential projects, with Ms Lloyd-Morgan saying it was increasingly difficult for some of her family office clients to find suitable opportunities.
“I think it’s becoming increasingly difficult to find development-ready land and opportunities that actually stack up once they go through the feasibility process,” she said.
The looming Olympics storm
The infrastructure squeeze could become more acute as Queensland accelerates preparations for the Brisbane 2032 Olympic and Paralympic Games.
Ms Lloyd-Morgan said industrial developments were already competing for infrastructure and services before the major demands associated with 2032 had fully emerged.
Industry could “already see the storm that’s coming”.
She said addressing the problem would require a coordinated approach involving the State Government, local governments, the private sector and utility providers, rather than simply allocating additional land for industrial development.
The Property Council has also called for an industrial infrastructure fund to help local governments and industry unlock new employment land.
A strong leasing market
Despite the constraints, Ms Lloyd-Morgan said demand for industrial property remained strong, particularly in the leasing market.
She works across retail, commercial and industrial leasing and said industrial continued to stand out, with deals moving quickly and landlords generally not needing to offer large incentives to secure tenants.
“From my point of view, leasing is still performing extremely well from a landlord’s perspective,” she said. “The market remains very strong.”
Changing buyer and seller dynamic
At the same time, a more cautious property transaction market was beginning to create a different dynamic between buyers and sellers.
Ms Lloyd-Morgan said some clients who had been preparing to sell assets had paused those plans, while investors with access to capital were considering whether the softer market presented an opportunity to buy.
“I have clients who were looking at selling but have now paused those plans, thinking, ‘Okay, maybe this is actually a good time to buy’.
“From what we’re seeing, sellers in the market right now are likely to be motivated, which could create some opportunities for buyers to secure a deal.”
She said that trend extended beyond industrial property to commercial and retail assets.
