Australia’s logistics and industrial leasing markets recorded a stronger-than-expected second quarter, with Cushman & Wakefield research showing occupier demand strengthened across most major capital cities.
According to the firm’s Q2 2026 Logistics & Industrial MarketBeat reports, approximately 1.3 million sqm of industrial space transacted nationally during the quarter. National vacancy remained steady at 3.7 per cent, despite more than 250,000 sqm of speculative supply completing over the same period.
Vacancy declined in four of the five major capital city markets, with Melbourne the only major market to record an increase.
Luke Crawford, Head of Logistics & Industrial Research, Australia, Cushman & Wakefield, says the industrial sector has continued to outperform expectations.
“Despite a more measured economic backdrop, occupier demand remains healthy across most markets,” he says.
“Businesses are increasingly using lease events to consolidate, improve efficiencies and upgrade into higher-quality accommodation, which is supporting activity even where overall expansion remains limited.”
Sydney recorded its strongest quarter of demand in more than a year, with gross take-up reaching almost 375,000 sqm and net absorption rebounding to about 215,000 sqm. Vacancy tightened to 3.7 per cent, although Cushman & Wakefield expects the rate to edge higher in the second half as 240,000 sqm of speculative supply is delivered.
Melbourne recorded almost 770,000 sqm of leased space over the first half of 2026, but the market continues to show a clear flight to quality. Nearly 85 per cent of quarterly take-up was prime grade, while vacancy rose modestly to 4.2 per cent.
Brisbane remained one of the strongest-performing markets nationally, with gross take-up surpassing 650,000 sqm over the first half. Strong net absorption pushed vacancy down to 3.5 per cent, while prime rents rose 4.3 per cent over the year.
Perth has become Australia’s tightest industrial market, with vacancy falling to 2.2 per cent following the lease of several large facilities. Prime rents increased 5.6 per cent over the year, supported by limited availability of modern facilities.
Adelaide also remains structurally undersupplied, with vacancy at 2.7 per cent and limited prime-grade space available outside the Inner North.
Cushman & Wakefield expects leasing volumes to remain healthy through the second half of 2026, although net absorption is forecast to remain mixed as occupiers prioritise consolidation and efficiency over expansion.
“A pullback in speculative development and ongoing structural drivers are expected to support fundamentals,” Luke says.
“This is positive for existing owners but likely more challenging for occupiers heading into 2027.”
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