Hedland & Newman

100 Billion Reasons to invest in Gladstone

With over $100 billion in infrastructure projects planned or under construction, the city of Gladstone in Queensland can be aptly described as a super infrastructure location for property investors.

Infrastructure investment has historically been a key driver in property values because it results in a rising demand for homes as well as higher living standards. For example, the massive new infrastructure investment in Gladstone is predicted to create a demand for an estimated 8,100 new dwellings by 2018.

Gladstone is now a key hub for the growing energy sector in Queensland and as a result is attracting massive overseas investment both in coal and LNG.

The Port of Gladstone is Queensland’s largest multi-commodity port and the fifth largest multi-commodity port in Australia. It is now the world’s fourth largest coal exporting terminal with coal making up 70% of the total exports from the port. To help cater for the increasing level of coal exports from Gladstone, approval was recently given for the $2.5bn Wiggins Island Coal Terminal Stage 1 project.

In addition to coal, Gladstone is also the centre of a rapidly expanding LNG industry. LNG emerged as a major industry in the city in 2010 with the approval of BG Groups’ $20bn Queensland Curtis LNG (‘QCLNG’) project on Curtis Island, across the harbour from Gladstone. A few months later in January 2011, Santos approved its $18.5bn Gladstone LNG (‘GLNG’) project also on Curtis Island.

This was followed with Origin approving the first stage of its $23bn Australia Pacific LNG (‘APLNG’) project in July 2011 with the second stage further approved a year later.  It is estimated that the potential of Gladstone’s LNG industry is capital expenditure totalling $70 billion and thousands of new jobs.

For investors taking a long term perspective of the property market, it is important to understand why Gladstone is attracting such a large level of investment and why it will continue in the future.

International companies are now pouring billions of dollars of new investment in Gladstone because of the surging demand for energy in the world – a demand which will continue well into the future.

This trend has been underlined by the latest predictions by the International Energy Agency (IEA) in its 2012 World Energy Outlook Report.

The IEA predicts that global energy demand will grow by more than one-third over the period to 2035 with China, India and the Middle East accounting for 60% of this increase.

Over the coming two decades, there be ongoing challenges to meet this growing world- wide demand for energy and that is why key energy hubs such as Gladstone will continue to attract the large infrastructure dollars and projects.

For investors seeking property in an established location, offering mining town rental returns in a lower risk environment – Gladstone should be given serious consideration during the coming year.