Australia’s Industrial and Logistics sector is closing on a new benchmark, with occupier take-up in 2021 up by nearly 900,000 sqm compared to the same point of a record 2020.
CBRE Research’s Australia Industrial Q3 Figures Report outlines that tenants signed leases for 3,124,593 sqm in facilities across Sydney, Melbourne, Brisbane, Adelaide and Perth though the first three quarters of the year.
That is just shy of the full-year record of 3,302,686 sqm in 2020, when take-up at the end of Q3 stood at 2,248,364 sqm.
The 2020 calendar year was the first time take-up exceeded 3,000,000 sqm in Australia.
Sass J-Baleh, CBRE’s Head of Industrial & Logistics Research Australia says occupier take-up in Australia has been consistently above the long-term average since 2015, but the data shows record numbers in three consecutive years and significant growth year-on-year.
“Last year was the first time the total national figure exceeded 3,000,000 sqm, but in 2021 that number has been passed much earlier, in Q3 rather than in Q4,” Sass says.
“Given we typically see a lot of leasing activity in Q4, we’re expecting the year-end level to surpass what we saw in 2020.”
E-commerce related occupiers have leased nearly 600,000 sqm in the year to date, with their activity expected to approach 1,000,000 sqm by year’s end.
Ms J-Baleh notes the role Melbourne’s extended 2020 lockdown is playing in e-commerce take-up in the city, and that its prime average rents are 23% lower than the western Sydney average.
“Lockdowns continue to accelerate the major growth trends for Industrial & Logistics, as more consumers take their non-discretionary and discretionary shopping online,” Sass says.
“As a result, we’ve seen more e-commerce and associated transport and logistics activity in Melbourne than anywhere else in the country. Cheaper average rents also make Melbourne appealing for occupiers, especially compared to outer western Sydney precincts, but investors are witnessing rental growth in the market, including 2.5 per cent Quarter on Quarter and 3.9 per cent Year on Year, in line with rising demand.”