One of Australia’s leading property advisory groups, Herron Todd White, has identified what it describes as ‘lifestyle industrial’ as a growth trend in residential property that is driving demand in our capital cities.
Lifestyle Industrial refers to the combination of industrial spaces with commercial and residential, with former heavy industrial premises living side-by-side with shops, bars and restaurants and dwellings.
“Lifestyle Industrial is a mix,” explains Chris McKillop, commercial director at Herron Todd White. “Industrial is changing: you’re going to still have heavy industrial uses, but Lifestyle Industrial is adding that retail focus.”
“You’re getting tenants in older industrial areas that have been surrounded by residential development in the last 20 or 30 years, so you’re getting uses like breweries, restaurants, barbers and florists.”
“As part of that, some savvy developers are seeing the opportunity to latch on and have the old caretaker’s units which were not always great, but given the changes of uses and the addition of amenities, they’re being viewed more favourably.”
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Moffat Beach on the Sunshine Coast in Queensland is cited by Herron Todd White as an example of this trend, but it is present in many other areas.
“Look at the old Woolhouse precinct in Brisbane,” said McKillop. “It just got completely gentrified into a residential area, whereas these are still operating industrial estates but have more amenities in them. Stockland and the new Aura estate are changing their uses in the new staging to allow for a gym, a vet and all these types of uses to go in there.”
“In the larger cities, you’re seeing changing uses of old office buildings well. Fringe locations where office vacancies started to creep up, people are rethinking the use of buildings. They’re looking to change the use in those fringe areas of cities.”
“We’re seeing it in the Sunshine Coast market. There’s a change of traditional industrial property - which is still operating, it’s not taking warehouses and making them residential – from, say, steel fabrication to a florist.”
“It then makes people look at building, still under industrial use code, your typical structure but with more architectural flourish, and adding in caretaker’s units above."
“At Moffat Beach, for example, on the Sunshine Coast, they’re purchasing a 100sqm industrial warehouse and a 100sqm two bedroom, one bathroom unit above for $700,000. And that’s in an area where it costs $1m to buy a house.”