Australia Industrial & Logistics Vacancy Report H2 2023

The national vacancy rate has increased to 1.1% for H2 2023, with upward movement for all major markets across Australia. This rate is still the lowest level globally. 
 
We are witnessing a steady increase in the vacancy rate across all cities as demand normalises and supply (to an extent) is being added to the market. Despite the rise in space availability, we do not expect to see vacancy rates to surpass 4% over the next 12 months.

Super prime grade stock is still being readily absorbed in the market at strong rental levels, and we do not anticipate demand for good quality assets in core locations to drop. Rather, vacancy is expected to rise in secondary grade buildings in secondary locations. Currently (as at 4Q24 preliminary data), the 2024 pre-commitment rate for new supply nationally is close to 50%.

Over the medium to long term, Australia’s supply of serviced industrial zoned land will remain constrained, and this will continue to play a role in a limited development supply pipeline. Coupled with this, demand will be driven by growth in Australia’s net exports, significantly rising population and expanding e-commerce sector.

Our Industrial & Logistics Vacancy Report for the second 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.