Australia’s industrial real estate market is now adjusting following a cycle of record growth, according to leading real estate agency Savills Australia’s recently released ‘Spotlight Industrial Shed Briefing – November 2024’ report. The report reveals that rental growth has halted across Australia’s three largest core industrial markets - Sydney West, Melbourne West, and Brisbane Southside – as vacancy stabilises.
Deal flow may also be at a turning point, with Savills’ data revealing industrial investments over $10 million reached around $2.5 billion in Q3. But while this reflects buoyant appetite, transactional activity shows that investors remain committed to capitalising on structural tailwinds to secure returns, according to Savills.
Industrial leasing activity on the East Coast is also rising in line with its pre-pandemic average, according to the report, with 842,500 square metres leased in Q3. This represents an increase of around 10% from last quarter, when take-up reached around 767,875sqm.
“There has been a notable uptick in the leasing of spec space, representing 14% of deal volumes and nearly double what we have seen in any quarter over the last year. It reflects increased demand for higher quality buildings, and a potential rebound from retailers and distributors ahead of the peak holiday shopping season,” said Savills’ National Head of Research, Katy Dean.