Sydney industrial transaction volumes hit AUD5.3b in 2024

This is a record level of sales transactions for the city.

In a recent report, JLL said industrial rent growth in Sydney was mixed in Q4 2024, with the inner precincts remaining flat and the Outer Western precincts recording between 2.2% (Outer Central West) and 2.6% (Outer North West) quarterly growth.

“We recorded AUD 1.56 billion in sales transactions in Q4 2024, over double the volume from the previous quarter. This brought the annual transaction volume to AUD 5.3 billion, a record result for the Sydney industrial market,” the report added.

Here’s more from JLL:

Occupier demand improved 30.0% over the previous quarter, reaching 26.1% above the 10-year quarterly average.

Leasing activity was driven by the manufacturing sector, with 50.2% of the area leased. This was the highest proportion for this sector since Q3 2019.

Completions remain elevated

In Q4 2024, approximately 198,100 s.m. of new industrial stock was completed in Sydney, with 77.2% located in the Outer Central West.

JLL is tracking around 769,900 s.m. of supply currently under construction, of which 42.1% is pre-committed. The majority of this supply will be delivered to the Outer Central West (49.3%) and Outer South West (26.3%).

Outlook: stability in rents and yields

We anticipate face rent growth to remain constrained but positive over the next 12 months, as vacancy-averse landlords negotiate incentives to secure tenants.

Further stability in investment yields is expected over the next 12 months, with a possible rate cut decision by the RBA in 2025 likely to give greater confidence that the next movement in yields will be a compression.