Sydney industrial completions rebound to 319,000sqm in Q1

This exceeds the 10-year average by more than 90%.

Sydney's industrial and logistics market experienced a slowdown in occupier demand during Q1 2026, ending four consecutive quarters of strong leasing activity, according to JLL.

Gross take-up fell 53.5% quarter-on-quarter to 199,200 sqm, around 20% below the long-term average. Activity was concentrated in the Outer Central West, Outer South West and South Sydney precincts, with Parratech's 20,500 sqm lease in Wetherill Park the largest transaction.

Supply completions rebounded sharply to 319,000 sqm, exceeding the 10-year average by more than 90%. “The largest proportion of quarterly supply was recorded in the Outer Central West precinct (225,300 sqm.), followed by the Outer South West (61,300 sqm) and the Outer North West (32,400 sqm.),” JLL reports.

Rental growth moderated during the quarter, with only the Outer Central West recording an increase. Incentives edged higher as landlords sought to secure tenants amid softer demand. Prime yields remained unchanged across Sydney following two quarters of compression.

JLL expects demand to remain subdued in the near term due to geopolitical uncertainty, while developers increasingly seek pre-commitments before commencing new projects.