Economy on verge of recovery

A research paper by Jones Lang LaSalle released on Wednesday argues local and international investors should turn their attention to the Sunshine State, which has strong growth prospects.

AAP

THE Queensland economy is on the verge of a "strong and sustained recovery", making it a good prospect for commercial property investment, a new report shows.

A research paper by Jones Lang LaSalle released on Wednesday argues local and international investors should turn their attention to the Sunshine State, which has strong growth prospects.

Jones Lang LaSalle's Queensland managing director, Geoff McIntyre, said the Queensland economy was on the verge of strong and sustained recovery, led by major engineering construction projects, including gas, coal and infrastructure projects.

"These projects support forecasts that Queensland will deliver significantly higher economic, population and employment growth than other states over the next few decades," Mr McIntyre said.

He said local institutional and offshore investors had historically assigned Queensland a relatively low weighting - around 15 per cent - within their commercial property portfolios.

But there was a strong case to take that allocation to around 22 per cent to maximise returns over the long term.

"The potential long-term payoff for investors is a narrowing of the risk premium applied to Queensland commercial property assets," Mr McIntyre said.

"Queensland's economy and population will grow at a faster pace than that of New South Wales and Victoria over the next few decades, and this will mean that Brisbane's office stock should also grow at a faster pace than Sydney and Melbourne.

"This should be seen as a very strong marker for the international investment community to look at the state in terms of their total investment in Australia, and increasing their exposure in Queensland."