Investing in ports

Where to start…. I am one of Richard's many borrowers and currently have 3 development sites in progress up there, for a total of 15-18 townhouses. The market is booming and there are fantastic opportunities.

The coal exports are increasing, but the primary investment in Gladstone is LNG. There are 4 major LNG projects each worth $15+ billion and a number of smaller projects there. In Gladstone the "smaller" projects however are still often several billion dollars each and would be considered major projects pretty much anywhere else.

A recent API magazine article stated there was $88 billion in committed investment in Gladstone in the next 4-5 years, more than anywhere else in the country, including Hedland or Karratha.

Rents are likely to skyrocket in the coming year as the major projects enter their construction phases. Just monitor the number of rentals available on realestate.com.au. There are currently 210 available, but this got down to around 60 a few months ago. In 2012, expect the number of rentals available to get considerably less than 50, with rentals going through the roof due to the number of competing projects, all looking to house workers that can't be housed in the worker camps, which will be full, assuming they can all find enough workers.

Each project has 20 year forward contracts worth 10s of billions of dollars, and these are just the initial phases, with many of them only currently committed to 1 or 2 trains, but have plans to do up to 6 trains each in future phases. If this continues, then Gladstone will be a hot market with high rental yield for at least the next decade and will continue to attract more industry, as a deep water port with unlimited power generation resources and a very willing state government to position further major industrial projects there.

It already has world class aluminium and concrete plants, an 1800 employee steel works and major power plant are soon to be built there. A major shopping centre just announced a huge expansion to cope with the anticipated growth, which will see Gladstone double in population in the next 20 years. It will be the industrial hub of Queensland and the most progressive city.

Gas will be the "oil" of the 21st century. The USA is introducing legislation to encourage consumers to switch cars to gas, to reduce their reliance on oil, as they are rapidly running out of oil, but have an abundance of natural gas. You can imagine what this means for the local Australian Ford and GM factories, with USA moving away from Oil. Gladstone has been labelled the Saudi Arabia of LNG and this major change will see it as a fantastic growth story. Just look at what has happened to real estate in every other market when LNG came to town, its a pretty short list, with amazing property growth, namely Karratha, Port Hedland and Darwin.

Hi fishmeet-

Here is a link to the local newspaper in Gladstone, so you can keep up to date with local news and realestate for sale. I have one IP there and still interested in more. The LNG industry there is in very early stages, and although rents have increased sharply in last 12 months, property values have not yet risen to the levels which most commentators and analysts expect they will due to the rapidly increasing population and the investment of capital occuring there now.http://www.gladstoneobserver.com.au/