Here’s a rundown of Australia’s Q3 industrial leasing performance by region

Learn more about the latest gross leasing volumes in Sydney, Melbourne, Brisbane, and Perth.

In Outer West Sydney, gross leasing volumes are trending broadly in line with pre-COVID levels, with 300,000sqm leased in the year to Q3 2023, according to a report from Dexus Research. Over the quarter most of the leasing activity came from transport and logistics industries concentrated within Eastern Creek. 

“While rental evidence suggests a wide variance in achieved rents, average prime net rent face growth increased marginally by 3.2% over the quarter. Vacancy for the Outer West precinct increased above 1%. While incentives appear to be stable for the most part, increased supply could apply some upward pressure,” the report added.

Here’s more from Dexus Research:

West Melbourne 

West Melbourne gross leasing volumes were softer over Q3 2023. This was heavily influenced by a lack of immediately available stock, following a period of elevated pre-leasing. Despite lower volumes, the vacancy rate in the West declined marginally. Across the broader Melbourne market there was a resurgence of demand from ecommerce-related retailers, despite a fall in ecommerce sales. Three quarters of this was concentrated in the South- East precinct. Lack of deal evidence saw lower growth in net face rents. Asking rents are now sitting between $125-130/sqm (for 3,000sqm+). 

Brisbane (South & Australian Trade Coast) 

Southern and Trade Coast gross leasing volumes are trending broadly in line with the past couple of quarters. A combined 300,000sqm has been absorbed year to Q3 2023, with volumes supported by higher than historical leasing in the Trade Coast. Leasing demand was generally driven by smaller Transport and logistics requirements sub-10,000sqm in the South. The Trade Coast saw a large pre-lease from government backed Powerlink of 45,000sqm at $176/sqm. The Trade Coast also saw the strongest growth in rents nationally over the quarter. The South precinct saw a lift in vacancy, however the figure is still below 2%. 

Perth (East & South) 

Gross leasing volumes across the South and East Perth markets were strong, with 82,000sqm absorbed over the quarter. Pre-leasing activity increased in the East, particularly driven from smaller transport and logistics requirements (sub 10,000sqm). Market vacancy in the East precinct is now above 1% whereas the South remains more constrained at 0.4%. Net face rental growth remained fairly flat over the quarter. Investors are becoming increasingly interested in land given the lack of immediately developable supply. Land values have now increased around 11% year on year in the South which is likely to place upwards pressure on economic rents. Incentives remain steady sub 10%.