Perth to see 11 new industrial developments by Q3 2024

The new projects will add 91,000sqm of supply to the market.

Two major industrial developments (≥3,000 sqm) reached completion in Perth in Q1 2024, totalling 40,100 sqm. 

According to JLL, there are 11 projects totalling 91,000 sqm currently under construction, expected to be completed by Q3 2024.

Here’s more from JLL:

The potential future supply pipeline has seen a significant uplift with 14 projects in the plans approved or plans submitted stages totalling 182,700 sqm. A significant proportion (95.6%) of these projects are currently without tenant pre-commitment.

Strong rebound in quarterly occupier activity

Occupier demand in the Perth market increased over Q1 2024, with 77,700 sqm of gross take-up recorded across 10 major occupier moves (≥3,000 sqm). Activity recorded in the quarter was above the two-year quarterly average of 53,668 sqm.

There was 257,200 sqm of gross take-up recorded in Perth over the last 12 months, above the 10-year average of 189,100 sqm. Demand was led by the Transport, Postal & Warehousing (34.0%), Manufacturing (14.0%) and Retail Trade (13.0%) sectors.

Rents stable across all Perth industrial precincts

Average prime existing net rents were unchanged across all three precincts in Q1 2024; the fifth consecutive quarter rents were stable. Rents were also unchanged on an annual basis across all three precincts.

The recent stability observed in the cost-of-debt environment has led to stable prime industrial and logistics yields. However, on an annual basis, yields recorded a softening of 75 basis points across all three precincts.

Outlook: Rental growth is expected to remain positive

Rental growth is expected to remain positive over the short to medium term, driven by strong ongoing occupier demand and scarcity in supply.

The industrial and logistics investment landscape will largely depend on broader market sentiment regarding interest rates. The current stability in the cost-of-debt environment is likely to instill improved investor confidence.

Note: Perth Logistics & Industrial refers to Perth's industrial market (all grades).