Perth industrial rents plateau

Industrial rents in Perth have flatlined after 12 months of growth, but the sector is expected to remain the standout commercial property market, JLL research shows.

JLL’s latest national logistics and industrial market overview, released today, revealed rental increases in every jurisdiction except Perth for Q4 2023.

Nationally, average net face rents lifted by 3.9 per cent to $186 per square metre in the final three months of 2023, increasing annual growth to 18.6 per cent.

This represented a stablisation from peak annual rent growth of 24.9 per cent recorded at the start of 2024.

In Perth, industrial rents have remained at about $140/sqm since Q2 2023, the report states.

Despite this, landlords are still achieving high rents for premium industrial assets, with Centuria Capital Group recently attracting $185/sqm for its Canning Vale asset.

And the city has experienced about 4 per cent annual growth in the past 12 months.

Occupier demand in Perth slowed in the final quarter, with 47,800sqm of gross take-up recorded across five major occupier moves, JLL reported. 

This was below the two year quarterly average of 66,200sqm of industrial space being taken up.

Over the past 12 months, Perth’s gross take-up of industrial facilities was 200,800sqm, below the 10-year average of 205,000sqm.

There are 13 industrial projects under construction in Perth, totaling 135,800sqm, due for completion in the third quarter of this year.

Industrial transactions are attracting yields of about six to 6.5 per cent, after a dramatic reduction in capitalisation rates in 2021.

The report stated that Perth’s industrial and logistics market was “expected to outperform other commercial property markets with robust demand fundamentals”.

“The industrial space will continue to be supported by the transport, postal and logistics industry expanding operations to handle the increased movement of goods resulting from the rise in eCommerce activity,” JLL stated.

JLL also points to a supply deficit for key industrial precincts nationally, as developers continue to catch up to strong demand.

There was 2.5 million sqm of space taken up nationally in 2023, above the 15-year average of 2.4 million sqm.