Brisbane industrial completions reach two-year low in Q4

Only 89,900sqm of new supply was added during the quarter.

New completions in Brisbane’s industrial sector reached 89,900 sqm in Q4 2024, which was the lowest number of new supply since Q4 2022, according to a JLL report.

Pre-commitment was moderate at 43%. New completions were highest in the Southern precinct (36,200 sqm) and Trade Coast (34,300 sqm).

Here’s more from JLL:

Industrial supply under construction totalled 411,600 sqm with a pre-commitment rate of 28.6%. Development activity is focused in the Southern precinct, a total of 222,400 sqm is under construction and forecast to complete in 2025 and 2026.

Occupier activity is softer in Q4 2024

Occupier demand for industrial space has decreased in comparison to Q3 2024. A total of 77,100 sqm was leased during the quarter, below the long-term 10 year quarterly average of 151,500 sqm.

Tenants within the retail trade industry supported quarterly demand. Bunnings pre-leased a 27,100 sqm warehouse in the Southern precinct, this marked the largest leasing transaction and only pre-lease recorded in Q4 2024.

Rent growth remains positive in all precincts

Net face rents remained highest in the Trade Coast at AUD 197 per sqm per annum. The Trade Coast outperformed other precincts with quarterly rent growth of 3.9% and year-on-year growth of 16.2%.

Investment volumes in Q4 2024 reached AUD 421.1 million, above the 10-year quarterly volume of AUD 257.9 million. A portfolio transaction has bolstered capital activity in the Brisbane industrial market.

Outlook: Delivery of new supply to moderate in 2024, as pre-lease activity slows

Gross take-up and pre-leasing activity may remain subdued in the near term, as tenants are hesitant to expand, in these current economic circumstances.

The vacancy rate could increase marginally in coming quarters, as large speculative developments are underway and forecast to complete in 2025.