Check out the latest industrial and logistics vacancy rates in Australia

Vacancy rates for facilities over 4,000sqm range from a high of 3% in Melbourne to a low of 1.8% in Sydney.

CBRE Research recently launched a new data set that assesses industrial and logistics vacancy in Sydney, Melbourne, Perth and Brisbane, with Adelaide to be included in future reports.

According to CBRE, whilst Australia and the World’s economies have felt the impact of the global pandemic, the Industrial and Logistics market has been moving from strength to strength.

A tight vacancy has underpinned this performance, as occupiers continue to experience unprecedented demands for their services. E-commerce, combined with the need for purchases to be made online have contributed to occupiers expanding their business capacity.

Along with changing consumer behaviours to meet the requirements of local lock-down restrictions, it is likely that distribution will continue to increase as this behaviour continues beyond the pandemic period.

Here’s more from CBRE:

Sydney

Supply across all NSW leasing markets remains tight, so the slight dampening in demand in Q1 and Q2 has had minimal impact to rents and incentives. However, some owners have been prepared to be more aggressive for renewals and new deals given the uncertainty in the market. There will be more leasing activity in Q3 2020 than in Q3 2019, so we are confident we’ll see strong leasing fundamentals leading into 2021.

NSW capital markets demand continues to increase post-30 June, as buyers focus on reweighting to logistics. Transactions were subdued in the first half of the year; we are now seeing an uptick in transactions, which bodes well for the lead into 2021. As always, core product remains very tightly held, which is encouraging most investors to acquire land and build out quality assets.

Melbourne

Victoria’s overall vacancy is low, mainly due to the fact most speculative development has been placed on hold, which has slowed down transaction volume.

The vacancy in Melbourne’s west is predominantly made up of short-term sublease space, a direct flow on effect of COVID 19 and the impact it is having on some of the 3PL and warehousing occupiers who have surplus space. Therefore, the total vacancy number is not a true reflection of the market, but an interesting trend that we are only seeing in the west market given the large amount of 3PL occupiers.

Melbourne’s North has a large vacancy rate; however, half the total space comes from two significant vacancies being the old Ford and Woolworths sites.

The south east vacancy number is at an all-time low, mainly because there has been limited speculative activity over the last two years, which is generally what stimulates movement in the market.

We are anticipating more subleasing opportunities to come to the market as some of the COVID-19 stimulus packages cease, but there is still a healthy amount of enquiry in the market that gives us confidence of fast absorption.

Brisbane

Across the state, supply is decreasing and the market is seeing increased demand from third-party logistics companies, ecommerce, warehousing and logistics groups. Speculative supply is mostly on hold amid pandemic-induced uncertainty, which is likely to result in an undersupply of “A-grade” stock. We anticipate that speculative supply will see an uptick in mid-2021 to accommodate increased demand. Currently, rental rates have remained flat and incentives are expected to decrease as supply tightens.

Perth

In Perth, tenant enquiry remains subdued across the board; however, we're seeing some enquiry from ecommerce and retail-related tenants, and mining sector enquiry remains constant. The level of vacant stock has been consistent over consecutive quarters and the completion of several recent preleases would indicate there has been some net absorption. The level of premium stock continues to decrease and now constitutes less than 20% of the total vacancy, conversely the levels of secondary stock continue to increase. Led by demand, there is potential for an increase in prelease activity and for premium stock level to continue to decrease.

Check out CBRE’s full interactive report here.