Here’s how the industrial property sector fared in various Australian regions in Q3

Leasing volumes in Outer West Sydney and Brisbane were subdued.

Dexus Research revealed in a recent report that leasing volumes in the outer West Sydney market were subdued over the third quarter of 2022, reflecting a lack of available short-term supply. 

Although the outer west has experienced record levels of completions (640,000sqm) year to date, most of this has been precommitted, leaving tenants scrambling for space. 

The report added: With the bulk of Kemps Creek supply more than 12 months away and a third already committed, surrounding markets have begun to benefit, particularly the Inner west and North West. Logistics companies continue to reconfigure supply chains to leverage the Moorebank Intermodal. Mainfreight pre-leased 55,000sqm at Moorebank Logistics Park and a smaller 8,000sqm facility at Keylink Estate, Minto. 

Here’s more from Dexus Research:

West Melbourne 

The West Melbourne market continued to attract the majority of the city’s demand (287,000sqm) over the quarter, however there continues to be growing interest in the North. The availability of serviced land benefited Dexus’s Horizon Estate over the quarter. The estate accounted for nearly 50% of the market’s demand including national retailers; Nike (61,000sqm) and Lululemon (22,000sqm). 

Supply chain delays have placed greater emphasis on location diversification. Techtonic industries pre-leased a record 74,000sqm in Melbourne Airport Business Park, their second facility of this scale in two years following the Yards Estate, Sydney. 

Brisbane (South and Australian Trade Coast) 

Leasing volumes were subdued in the South market after a strong prior quarter, while Trade Coast leasing volumes continued to benefit from strong agriculture export volumes (up 20% yoy), which saw 10,000sqm leased by Rain Agribusiness, Pinkenba. The future BNE Auto Mall also continued to draw interest to the precinct with two automotive industries taking up space in proximity. The majority of leasing deals within the South were sub 10,000sqm filling the remaining spaces of completed projects. 

Perth (East and South) 

Demand across the East and South markets climbed over the quarter (113,000sqm) following growth in the state’s retail and mining sectors. Shorter delivery times and increasing road freight costs (8% yoy) continued to drive local demand for space. Office Works leased 15,000sqm at Perth Airport and JB Hi-Fi leased 12,000sqm at Roe Highway Logistics Park. 

Proximity to airports remain crucial for time sensitive freight. The outlook for Perth remains positive with mining exploration at record highs and rising iron ore production (Rio Tinto). Space requirements and rent growth are likely to benefit from the mining industry.