Why invest in Gladstone?

Portfolio has been following events in the Queensland regional town of Gladstone for some time. Up until now many of the major mining projects that are to be based in Gladstone have been in the planning and approval stage, however in 2011 many of these projects have moved into construction phases. This has already put pressure on the housing market in Gladstone. Currently the values are very strong and are also backed up with an extremely tight rental market. The third large player in the market Origin Energy Consortium has on the 28th July just released that they also have financial approval to spend $14 billion for the first stage of construction and they predict 6,000 workers.

Both QGC and Santos and now Origin have announced they wish to spend upwards of $15 billion dollars each in the preparation of these projects. The projects involve the huge expansion of coal seam gas production in the Surat and Bowen Basins, connection of the new production fields to Gladstone with underground pipelines. The projects also include massive gas liquefaction and loading plants located on Curtis Island in Gladstone. Both Santos and QGC have sold the majority of the gas to sovereign purchasers over the next 20 years- this makes the financial case for the expenditure extremely strong. QR also announced 5th September that they have done a deal with mining companies to commence a $900M upgrade to their rail system in and around Gladstone with estimated 3,000 workers required.

The Wiggins Island Coal Terminal also obtained financial close early October. The are numerous other huge projects under the final stages of planning- refer our Matusik Report attached.

With any affordable project that Portfolio undertakes we understand that the rental market is a fundamental factor in the termination of a developments success. The rental market in Gladstone is extremely strong and only increasing and there is current 1% vacancy rates.

For more information download the Matusik Market Overview Report – Gladston