Australia Industrial & Logistics Vacancy Report H1 2023

July 4, 2023

Looking for a PDF of this content?

The national vacancy rate has remained at 0.6% for H1 2023, with marginal movement for some major markets across Australia.

Our Industrial & Logistics Vacancy Report for the first half of 2023 highlights the current vacancy rate by city and by precinct, as well as the historic trend. The Report delves into the net absorption of floorspace, and associated rental growth trend we are witnessing.

We have undertaken further studies on global trends – specifically on the correlation between the vacancy rate and rent growth. Looking at major industrial and logistics markets offshore, we have found that double-digit rental growth, averaging 14.2% year-on-year (over the past three years), has been recorded for cities with a sub-4% vacancy rate. In contrast, rental growth has been less than half this - averaging 6.5% - for cities with vacancy rates higher than 4%.

While vacancy rates in other countries remain low, we have begun to see a slight uptick in some offshore markets. We expect to see more of this globally over the next six-to-12 months amid global economic headwinds. However, the supply-demand dynamics in Australia are unique. The Australian market is shaped by a chronic undersupply of industrial space, which will keep vacancy rates at relatively low levels over the short-medium run.