Developers will have the defining say in whether industrial properties across Australia continue to provide strong yields for investors, according to a report from Colliers International.
The Colliers' Industrial Research and Forecast Report for the second half of 2014, revealed that total returns from industrial property had continued to strengthen since December 2012, reaching post-Global Financial Crisis highs of 12.1 per cent in the June 2014 quarter.
The report found that more than 1.6 million sqm of new industrial floor space (in facilities over 5000 sqm) was expected to be added to the capital city industrial markets, driven by increased demand for more space from businesses seeking efficiencies or engaged in e-commerce.
"As long as developers don't get too far ahead of the supply curve and these factors remain buoyant, industrial will continue to offer superior commercial property returns and will see further growth in scale," the report said.
Colliers said that the growth in returns had attracted interest from investors, with many adjusting their portfolios to accommodate a higher share of industrial property in recent quarters.
The report revealed that a scarcity of "quality stock" had driven "intensive competition among institutional investors" in prime industrial assets, attracted by the record returns currently on offer.
