This was Sydney’s second largest industrial leasing deal in the last 10 years

It was for a pre-commitment to a facility spanning over 100,000sqm.

According to a JLL report, Sydney’s gross industrial take-up decreased 9.2% over the second quarter to 310,000 sqm but remained 25.4% above the ten-year quarterly average. Pre-leasing and leasing of new completions accounted for 52.9% of area leased, but many tenant moves were accompanied by backfill space.

“The largest deal the quarter was Kmart Group’s pre-commitment to a 104,500 sqm facility in Moorebank, representing Sydney’s second-largest industrial leasing transaction of the last ten years,” the report revealed.

Here’s more from JLL:

Sydney recorded 289,000 sqm of completions in Q2 2025, which were predominantly located in the Outer South West (56.2%) and Outer Central West (34.8%).

Under-construction stock decreased to 876,300 sqm; however, pre-commitments increased to 57.9%, up from 39.5% previous quarter.

Rents flat, incentives increase in some precincts

Rents were stable in Q2 2025. Incentives increased in the Outer Central West and Outer South West, contributing to effective rent reversion.

High levels of investment targeting Sydney industrial product have supported yield tightening. Prime midpoint yields compressed 6 bps in the Outer Central West and 13 bps in the Outer South West.

Outlook: Stability in the rental market, but further yield compression expected

We anticipate that increasing vacancy, driven by speculative completions and backfill space, will further constrain face rent growth over the balance of 2025, with high incentives expected to lead to ongoing effective rent reversion in supply-heavy precincts.

We expect investment volumes to remain elevated in the Sydney industrial market over the next six months, with high activity levels expected to support ongoing yield compression into 2026.