Australian industrial take-up hits 1.2m sqm in H1

This is below the half-yearly average of 1.3m sqm.

According to a report from Dexus Research, inquiry levels in Australia’s industrial sector in Q2 2025 were slow, with many occupiers cautious about expansion or relocation decisions and favouring renewals. Take-up nationally was 1.2 million sqm in the past six months, below the average six month run rate of 1.3 million sqm.

“Most of the leasing activity in Q2 was due to logistics and retail tenants. While soft in the short term, the outlook for demand is expected to improve as interest rate cuts and wages growth help lift consumer spending and occupier demand,” the report added.

Here’s more from Dexus Research:

Close to half of the supply pipeline for 2025 has now completed, with 558,000 sqm coming onto the market in Q2. A shift from speculative to prelease strategies is leading to a decrease in speculative supply. Half of the remainder of supply due to come online in the next 6 months is pre-committed. High construction costs are weighing on development feasibilities, pushing out the timing of many planned developments. This should help constrain the rises in vacancy in the future.

Vacancy rates continued their slow rise across the country, excluding Perth where they declined slightly. Sydney vacancy is highest in the Outer West (4.7%) and South (4.0%) but is overall sitting at 3.0%. Melbourne vacancy is highest in the North (4.5%) and is overall 2.9%. Brisbane South vacancy is the highest nationally at 6.7%, with overall vacancy at 4.3%. Perth vacancy is the tightest across the country at 2.8%.

Net face rent growth has slowed and incentives have crept up to attract tenants, pushing net face rents up but keeping net effective rents flat. For most markets, rent growth was flat through Q2 2025. West Melbourne, South Brisbane and the ATC saw the most rent growth with 3.6%, 1.4% and 1.9% respectively.

Yields have stabilised in the past six months, with some markets seeing mild yield compression.