Industrial Sales Highlights – By John Andrew – October 2024

Despite rising vacancies and a normalization of demand, Brisbane’s industrial market remains driven by strong fundamentals, including population growth, infrastructure development, and continued demand from key sectors like logistics and transport. 

Below is a summary of key market indicators, including vacancy rates and supply, leasing activity, investment trends, and rental growth over the reporting period. 

Vacancy Rates and Supply

• Vacancy rates in Brisbane’s industrial market remained stable, ranging from 2.7% to 3.38%. While slightly up from previous quarters, they remain low by historical standards. 

• New completions in Brisbane contributed significantly to the national industrial pipeline, with over 40% of new development completions in Australia coming from Brisbane, particularly in the Southern Growth Corridor. Speculative development is on the rise, causing a slight increase in vacancy, but the market remains tight. 

Leasing Activity 

• Leasing take-up in Brisbane saw a 44% increase in the first half of the year, however has slowed in recent months. The West and South submarkets were especially active. 

• Leasing demand was bolstered by speculative completions and sustained demand from the transport and logistics sectors, which accounted for a significant portion of the leased space. 

Investment Activity 

• Investment volumes in Brisbane grew, with $225 million in sales during the first half of 2024. Prime yields in Brisbane slightly firmed to 5.67%-6.20%, indicating continued confidence in the market. 

• Major transactions included notable sales such as 347 Lytton Rd, Morningside, for $110 million. 

Rental Growth 

• Prime rental growth remained strong for the first half of 2024, reaching up to $180/ sqm (above 1,000sqm), however has dropped slightly in recent months. 

• Incentives offered to tenants remained steady, ranging between 5% to 15%, with no significant increases despite the rise in vacancy rates.