The forecast for Adelaide's industrial market is positive but cautious with smaller assets located in prime locations expected to show the strongest performance in the short term according to the latest CBRE Industrial MarketView report.

CBRE Global Research and Consulting Manager Kate Gray said confidence had been returning to the market throughout 2010, with private investors and owner occupiersshowing particular interest in assets valued at under $2 million.

Gray said activity in the $2 million+ range was also expected to increase this year after a subdued 2010 during which only eight transactions had occurred in this price bracket.

Due to rising interest rates, strong interest was expected to center on prime industrial stock. “Properties which are of secondary grade and location are likely to continue to be difficult to move in the first half of 2011,” CBRE Director, Industrial & Logistic Services, David Reidsaid. “However, smaller assets below $2 million are likely to remain in strong demand, with interest already being shown from both private investors and owner occupiers. It is likely that activity in the above $2 million sector will also show some improvement in the first half of 2011, but it is not forecast to be as strong as the peaks in 2007 and 2008.”

CBRE’s MarketView report also forecasts a pick up in construction activity following a much more active 2010 during which 133,113 square meters of new space was completed, well above the 85,339 square meters completed during 2009.

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