Perth industrial rent growth leads nation

Industrial rents in Perth have grown by 41 per cent in 2022, the fastest rate of growth nationally, new research from Knight Frank Australia shows.

The national real estate group’s latest industrial review showed that prime net face rents in Perth’s industrial areas are now $133 a square metre, up from less than $100/sqm 12 months ago.

Perth’s rental growth over the 2022 calendar year surpassed the next highest performing market of Sydney, which has 29 per cent growth.

However, Sydney’s industrial rents are at $210/sqm, by far the highest in the nation, followed by Brisbane at $137/sqm and Melbourne at $126/sqm.

Rents in Perth’s industrial areas grew by 7 per cent in the final quarter of 2022.

Knight Frank head of industrial logistics WA Geoff Thomson said low supply coupled with strong demand in WA had resulted in rental growth.

“We saw sustained strong demand in the fourth quarter of last year and into this year, with supply well below 100,000 square metres,” he said.

“Strong demand continues to come from the mining industry, manufacturing and the e-commerce sector, all of which are underpinning strong rental growth.

“There are also a number of sizeable infrastructure upgrades in the Perth metropolitan region, which is also leading to demand for industrial space.

“Existing tenants are requiring additional space and new market entrants have new requirements, which is increasing competition for scarce stock and has continued to push rents to new highs.”

The research showed rents in Perth’s north and east showed the strongest growth, with 12.7 per cent and 7.4 per cent respectively in Q4 2022.

The report also showed land value for medium sized lots in industrial areas had grown by 19.8 per cent over 2022.