Sydney Industrial and Logistics Land Supply 2023

June 27, 2023

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We are pleased to share an update of our Sydney Industrial and Logistics Land Supply report that was published in 2021. The report provides industry leading insights on our study of where and when land parcels are/will be available for development.

Key Points:

  • Only 4% (or 585 ha) of the total industrial zoned land in the Sydney Metropolitan Region is undeveloped and serviced.
  • We have identified 125 ha available for development (with no current commitments to develop) over the next three years.
  • We expect an average of 146 ha of land is required each year. This falls short of the 137 ha supply over 12-18 months.
  • Sydney has the tightest vacancy rate of any city globally (0.2%), and this is forecast to remain at sub-2% over the next two years given a high level of pre-committed development supply.
  • Majority of lease transactions over the past three years have been due to occupier expansion / new space requirements rather than relocation purposes. 
  • The top three industry sectors driving demand for space in Sydney have been Transport & Logistics, E-commerce, and Manufacturing.
  • The supply response has been insufficient to meeting demands in the Sydney market and this has led to record-breaking double digit rent growth over the past 18 months.
  • Double digit rent growth, averaging 14% (CAGR 1Q21-1Q23), has been recorded globally for major cities with a sub-4% vacancy rate. We forecast annualised rental growth in Sydney of 5.4% (CAGR 2023-27) for super prime grade assets.