“As the market undergoes this transition, stakeholders should approach the coming year with cautious optimism…” – John Andrew, FAL Property Group
Brisbane’s industrial market is experiencing a rise in vacancy rates, signalling a rebalancing of supply and demand after a period of record-low vacancies. This shift is driven by larger third-party logistics companies adjusting their distribution networks in response to normalized e-commerce demand, with the Southside seeing the highest vacancy levels due to large-format speculative projects.
LEASING RATES
Leasing activity has remained robust, with gross take-up levels across Australia holding steady. However, the Brisbane southside market has seen a stabilization in prime net face rents, and we’re not seeing rental
growth currently. This plateau follows a deceleration observed earlier in the year, marking a departure from the rapid rental growth experienced in previous years. Prime rents on the southside are currently averaging
$155-160/sqm for >2,000sqm and $165-175/sqm <2,000sqm.
INCENTIVE LEVELS
Incentive levels have shown signs of stabilization after a period of increase. Throughout 2024, incentives had risen, effectively doubling in some submarkets since the year before. However more recently, most
markets, including Brisbane’s southside, reported no further changes in average incentives. This stabilization is expected to bolster investor confidence and help landlords maintain competitive lease terms.
SALE RATES PER SQUARE METER
The industrial property market has seen a shift in sale rates per square meter. The overall market has experienced a rebalancing, with rental growth halting in major industrial markets, including Brisbane’s southside. This stabilization suggests that sale rates per square meter may also be experiencing a period of adjustment following previous growth.
SALE YIELDS
Investment volumes in the industrial sector have shown resilience, with a notable increase in activity. In the third quarter of 2024, industrial investments over $10 million reached approximately $2.5 billion, reflecting a strong appetite among investors. This surge in investment activity suggests that sale yields have remained attractive, maintaining investor interest in the market. Yields have remained steady at 5.75% – 6.5% for prime-grade assets, with signs of tightening expected as interest rate cuts are anticipated in 2025. Investor sentiment has improved, with institutional buyers increasing their market share in the second half of
last year.
PROJECTIONS FOR THE NEXT 12 MONTHS
The Brisbane southside industrial property market is expected to stabilize, with vacancy rates holding steady. Leasing rates may see modest growth in areas with low supply, while incentives stabilize. Sale rates per square meter could gradually rise, driven by infrastructure projects and demand. We also expect investors’ appetite to remain strong, especially if further interest rate cuts occur.
Brisbane’s industrial market is experiencing a rise in vacancy rates, signalling a rebalancing of supply and demand after a period of record-low vacancies. This shift is driven by larger third-party logistics companies adjusting their distribution networks in response to normalized e-commerce demand, with the Southside seeing the highest vacancy levels due to large-format speculative projects.
LEASING RATES
Leasing activity has remained robust, with gross take-up levels across Australia holding steady. However, the Brisbane southside market has seen a stabilization in prime net face rents, and we’re not seeing rental
growth currently. This plateau follows a deceleration observed earlier in the year, marking a departure from the rapid rental growth experienced in previous years. Prime rents on the southside are currently averaging
$155-160/sqm for >2,000sqm and $165-175/sqm <2,000sqm.
INCENTIVE LEVELS
Incentive levels have shown signs of stabilization after a period of increase. Throughout 2024, incentives had risen, effectively doubling in some submarkets since the year before. However more recently, most
markets, including Brisbane’s southside, reported no further changes in average incentives. This stabilization is expected to bolster investor confidence and help landlords maintain competitive lease terms.
SALE RATES PER SQUARE METER
The industrial property market has seen a shift in sale rates per square meter. The overall market has experienced a rebalancing, with rental growth halting in major industrial markets, including Brisbane’s southside. This stabilization suggests that sale rates per square meter may also be experiencing a period of adjustment following previous growth.
SALE YIELDS
Investment volumes in the industrial sector have shown resilience, with a notable increase in activity. In the third quarter of 2024, industrial investments over $10 million reached approximately $2.5 billion, reflecting a strong appetite among investors. This surge in investment activity suggests that sale yields have remained attractive, maintaining investor interest in the market. Yields have remained steady at 5.75% – 6.5% for prime-grade assets, with signs of tightening expected as interest rate cuts are anticipated in 2025. Investor sentiment has improved, with institutional buyers increasing their market share in the second half of
last year.
PROJECTIONS FOR THE NEXT 12 MONTHS
The Brisbane southside industrial property market is expected to stabilize, with vacancy rates holding steady. Leasing rates may see modest growth in areas with low supply, while incentives stabilize. Sale rates per square meter could gradually rise, driven by infrastructure projects and demand. We also expect investors’ appetite to remain strong, especially if further interest rate cuts occur.
