Welcome to an in-depth analysis of the latest Cordell Construction Market Update. As a seasoned property investment professional, I aim to distil this wealth of information into digestible insights for you. This review aims to highlight the key points and update on major spends around Australia.
Overview of the Australian Construction Pipeline
The Cordell Construction Report revealed a total of 1,321 new construction projects identified throughout June, with an estimated value of $13.6 billion. This represents a 9.4% increase compared to the previous three-month period. However, it is worth noting a 13.7% decrease when compared to the same period in the previous year.
State-wise Breakdown
The geographic distribution of these new projects is quite varied. Victoria accounted for 30.0% of these projects, followed by New South Wales (28.7%) and Queensland (14.8%). The most expensive new project, a $1.7 billion wind farm with battery storage, is located in the Edward River Council area in New South Wales.
Project Categories
The projects can be categorised as follows:
• Apartments & Units: 23.5%
• Community: 20.7%
• Commercial: 12.1%
• Industrial: 15.5%
• Civil Engineering: 25.1%
• Mining: 3.1%
Projects Transitioning into Construction Phase
During June, a total of 370 projects transitioned into the construction phase. This represents a 1.6% increase compared to the previous quarter and a decrease of 16.2% compared to the same period in the previous year. The combined value of these projects is estimated to be around $4.0 billion.
Geographic Distribution
In terms of geographic distribution, 27.6% of these projects are located in New South Wales, followed by Queensland (23.8%) and Victoria (19.5%). The highest dollar-value project, a battery energy storage project valued at $675 million commenced in June in Collie, Western Australia.
Project Categories
The category-wise breakdown of these projects is as follows:
• Apartments & Units: 13.0%
• Community: 24.9%
• Commercial: 8.6%
• Industrial: 12.4%
• Civil Engineering: 40.0%
• Mining: 1.1%
State Highlights
New South Wales (NSW)
A noteworthy development in NSW is the acquisition of a 4.8-hectare site at Banksmeadow by ESR Australia. The site was purchased from industrial coating resins manufacturer Allnex. The plan is to develop a multi-storey warehouse facility, while Allnex continues to lease the site for another five years.
Tasmania (TAS)
In Tasmania, Line Hydrogen received approval for its 7.6MW George Town green hydrogen plant. The plant, slated to be Tasmania’s first green hydrogen production, storage and distribution facility, is set to commence construction soon and aims to begin production by the end of 2023.
Victoria (VIC)
In Victoria, the Southern Ocean off Portland has been proposed as the second offshore wind-declared area. A 60-day public consultation process has been initiated before a decision is made by the Australian Government.
Northern Territory (NT)
In the Northern Territory, tenders have been invited for the design and documentation services for a 40-bed boarding facility at Tennant Creek High School.
Queensland (QLD)
In Queensland, Greenleaf Renewables has partnered with Spanish-based Enerfin as its new development partner for the 166MW Stony Creek wind farm in the South Burnett Region.
Western Australia (WA)
In Western Australia, the East Perth Common Ground project reached a key milestone, with ADCO Constructions confirmed as the builder for the $70 million project.
Australian Capital Territory (ACT)
In the ACT, the City Renewal Authority has released land for development by experienced developers.
South Australia (SA)
In South Australia, concept plans for a $74 million upgrade of Noarlunga Hospital are currently underway.
Mining
In the mining sector, construction has commenced on the Western Range Pilbara iron ore mine in Western Australia, a joint venture between Rio Tinto and Baowu Steel.
Conclusion
The Cordell Construction Market Update released in July 2023 (Click Here to read the full report) provides a comprehensive snapshot of the current state of the Australian construction market. It offers valuable insights for anyone involved in property investment. By understanding new projects’ trends, values, and locations and those moving into the construction phase, investors can make informed decisions about where to focus their efforts, based on key metrics of infrastructure and amenity spend.
It’s important to remember that while big data, like the information provided by CoreLogic, can provide valuable insights, it’s also crucial to interpret this data in the context of your specific investment strategy and goals. As always, due diligence and a thorough market understanding are key to successful property investment.
For more information on how this report can benefit your property investment strategy, or to discuss your client’s specific requirements, feel free to contact me. Together, we can navigate the complexities of the construction and property investment market, leveraging data to make informed and profitable decisions.
Author – Nick Menz Acquisition Director
