Australia’s logistics and industrial (L&I) occupier market is expected to tighten from 2026 as a slowdown in new developments coincides with renewed tenant demand, according to Cushman & Wakefield’s Inflection Point report.
The firm forecasts a swing back to landlord-favourable conditions, with national vacancy rates predicted to fall from a peak of 4.0 per cent to around 2.5 per cent by late 2027 and as low as 1.8 per cent by 2030. Prime net face rents are expected to grow by 3.9 per cent in both 2026 and 2027, with national growth averaging 4.8 per cent per annum through to 2030, led by Melbourne.
Gross annual take-up in 2025 has already strengthened, with 2.9 million square metres leased and projections pointing to 3.6 million by year’s end. Despite this, net absorption remains subdued at under 350,000 square metres amid lingering uncertainty. From 2026, occupier activity is expected to lift, driven by lease expiries covering eight per cent of total national stock.
Speculative supply is forecast to fall 46 per cent in 2026–27, with around 900,000 square metres of projects delayed as rising construction costs and higher required economic rents – up to 25 per cent above current levels – weigh on feasibility.
Cushman & Wakefield’s Luke Crawford says recovering consumer confidence is translating to stronger logistics demand.
“As confidence returns, we expect this to translate into stronger demand for L&I space,” he says.
“The drop in speculative supply over the next two years is expected to coincide with a pick-up in demand. We believe this will mark an inflection point, with a swing back to landlord-favourable conditions amid tightening vacancies and rising rents at a national level.”
Cushman & Wakefield National Director, Head of Logistics & Industrial Brokerage, David Hall, notes occupiers still have a short window to secure space before conditions tighten again.
“The combination of rising rents and yield compression over coming years is set to have a positive impact on development project feasibility from 2027 onwards,” says David.
“In the meantime, there’s a premium on flexible and data-driven strategies, particularly given conditions and opportunities continue to vary across sub-markets.”
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