This article is from the Australian Property Journal archive
MELBOURNE and Adelaide are leading the country through surging industrial rents, as the sector records record sales turnover and firming yields.
According to m3property, as the country’s industrial sector saw its sales double over 2021, with $18 billion in turnover for properties over $20 million, Melbourne’s industrial rents rose by 16%, while Adelaide followed with 11.6%.
For Melbourne prime rents also remained the most competitive of the major Australian cities, at an average of $96/sqm.
“Adelaide rents are now $104 per square metre while Sydney is the most expensive at $150 per square metre while industrial space in Brisbane will fetch around $124 per square metre,” said Matt Webb, director at m3property.
Webb noted that 2021 marked a record rate of take-up, with the ever expanding e-commerce sector driving up occupier demand.
“Prime yields have also tightened to all time lows with Sydney recording a range between 3.25% to 4.75% while Melbourne is now at 3.5% to 4.75%, Brisbane at 4% to 4.75% and Adelaide slightly softer with a range between 4.5% and 6.25%,” said Webb.
Responding to strong demand, DevelopmentWA recently released seven new industrial lots in its Forrestdale Crossroads Industrial estate, while funds manager Clarence Property announced plans for a $150 million industrial estate in south west Brisbane .
The most active participants in the market have been foreign buyers, who accounted for 57.3% of total sales, with REITs following with 29.6% of market share.
“The macroeconomic drivers of industrial occupier and investor demand has been favourable up until the present time,” added Webb.
Rents are only expected to rise over 2022, which m3property anticipates will push up values in the short to medium-term.
