MELBOURNE TO BRISBANE INLAND RAIL PROJECT A BOON FOR LOGISTICS PROPERTY: ANALYSIS.

The $10 billion Melbourne to Brisbane inland rail project could boost industrial property values and drive development of new inter-modal facilities.

The federal government has committed an $8.4 billion equity investment to the Australian Rail Track Corporation for the 1700-kilometre rail link, the commonwealth’s biggest rail project in 100 years.

An analysis of the proposal by Colliers International identifies a series of potential benefits for the industrial property market.

Among them are the creation of intermodal facilities and logistic hubs in strategic locations, an uplift in industrial land values near the rail route and greater focus on the ports of Brisbane and Melbourne.

The regions most likely to benefit from the mooted rail link are Darling Downs, Acacia Ridge and Bromelton in Queensland, Tottenham in Victoria and Parkes in New South Wales, according to Malcolm Tyson, Colliers managing director of industrial.

Major players such as Linfox, CEVA Logistics, Toll Holdings, DB Schenker, DHL, Woolworths, Coles, GrainCorp, Bluescope and Visy could all be expected to involved in freight along the new route.

“The benefits for these users would range from operating cost savings, time savings, improved reliability, improved availability and resilience to incidents,” Mr Tyson said.

“Providers of the intermodal transport and logistic hubs and industrial estates may also emerge to cater for the increased demand and relocation requirements from these users.”

There is strong evidence for a correlation between new infrastructure projects and associated rising industrial land values, according to Colliers.

In Melbourne, with the proposal of the West Gate tunnel project in 2016 land values in the western market have increased by 25 per cent within the year.

That increase is well above the long-term annual average growth rate of 2.8 per cent.

In Brisbane, land values in the Australia Trade Coast rose after the completion of the Gateway Upgrade in 2010.

In Sydney, the average annual land value growth in the M7 catchment rose 22 per cent over the three-year construction period Westlink M7 Motorway which opened to traffic in 2005.

The catchment included Blacktown, Moorebank, Smithfield, and Wetherill Park. The opening of the M5 also contributed to this uplift in values.

“We would anticipate that as firms begin to look to these middle suburban ring and outer regional areas supported by the completion of the Inland Rail, stronger demand should lead to increasing land values and overall industrial property performance over the long-term,” Mr Tyson said.

Posted on Thursday, 16 November 2017
by Jessica Hammoud in Latest News

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