Western Sydney is consolidating its position as New South Wales’ logistics and industrial growth corridor, driven by its share of undeveloped employment land, a major construction pipeline, and rising investor activity.
According to the Western Sydney Industrial report (Issue 4, October 2025) from RWC Western Sydney, the region holds approximately 6,940 hectares of Greater Sydney’s 7,169 hectares of undeveloped employment land. This equates to 97 per cent of the total, positioning Western Sydney as the dominant location for future industrial and logistics development.
The report shows the Outer West accounts for 3,776 hectares, while the South West holds 2,765 hectares, meaning these two precincts represent the majority of the region’s future industrial land supply.
However, the report notes that the key constraint is not rezoning, but the ability to deliver supporting infrastructure that converts land into construction-ready industrial sites.
Major development pipeline across the west
RWC Western Sydney reports that industrial development activity remains substantial across the region, with the Outer West continuing to lead Sydney’s supply pipeline.
The Outer West has 160 projects representing a combined 5.1 million square metres of potential industrial space across various planning stages. Of this pipeline, 76 projects are DA-approved, representing 2.1 million square metres, while 11 projects are under construction, totalling 347,000 square metres.
In the South West, the pipeline includes 112 projects representing 2.7 million square metres of potential industrial space. RWC reports 58 DA-approved projects totalling 1.1 million square metres, with 302,000 square metres currently under construction.
The Inner Central West pipeline is smaller but still material, with 63 projects representing 1.1 million square metres of potential space. Only 55,000 square metres is currently under construction across five projects, reflecting the land constraints of established industrial precincts.
The North West pipeline remains the most limited, with 34 projects representing 324,000 square metres, with RWC noting that new supply is largely infill-based due to land constraints.
Investment activity concentrated in Western Sydney
The report indicates Western Sydney is the dominant region for industrial investment activity across Sydney.
RWC Western Sydney reports the region captured 68 per cent of Sydney’s $6.2 billion in industrial transactions in the year ending September 2025, excluding data centre activity.
The buyer mix is also shifting, with cross-border capital increasing to approximately 50 per cent of buyers, compared to around one-third previously, suggesting growing offshore interest in Sydney’s industrial market.
Rental conditions stabilise after rapid growth
Rental growth across Western Sydney has moderated after several years of rapid escalation.
RWC reports net face rents held flat year-on-year across all four regions through September 2025, following annual growth averaging between 14 and 20 per cent during 2021 to 2023.
In the Outer West, prime net face rents are reported at $218 per square metre, while secondary rents sit at $202 per square metre, both flat year-on-year.
In the South West, prime net face rents are reported at $205 per square metre, with secondary rents at $185 per square metre, also flat year-on-year.
In the Inner Central West, prime net face rents remain the highest across the region at $232 per square metre, with secondary rents at $218 per square metre.
RWC notes that while face rents have stabilised, incentives have increased across most submarkets, softening effective rental outcomes compared to peak conditions.
Western Sydney Airport expected to drive industrial demand
The report highlights the Western Sydney International Airport, scheduled to open in late 2026, as a major driver of industrial and logistics positioning, particularly for precincts in the Outer West and South West.
The report states that the Aerotropolis Sector Plan identifies 4,448 hectares of land that could become serviceable by 2030, creating a framework for future supply delivery.
Data centre development intensifies land competition
RWC also notes growing competition for industrial land from digital infrastructure projects.
The report states that more than 650,000 square metres of data centre development is currently in planning across Western Sydney, driven by increasing demand linked to AI and cloud computing.
In the North West, the report identifies five data centre proposals in early planning stages within Ryde LGA, contributing to increased competition for power-served sites.
Market indicators show stabilisation and positive returns
RWC reports that Western Sydney’s industrial market has moved into an expansion phase through 2025, supported by improving capital returns.
The Outer West recorded total returns of 7.6 per cent in the year to June 2025, comprising 3.5 per cent capital growth and 4.1 per cent income return.
The Central West recorded total returns of 5.7 per cent, supported by 1.8 per cent capital growth and 3.9 per cent income return.
RWC states that yields have stabilised across submarkets, with prime yields generally ranging around 5.10 to 5.20 per cent, while the spread between prime and secondary assets has widened as investors place greater emphasis on ESG credentials and lease quality.
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