- The median price for a building in Perth's industrial sector has increased over two years.
- Perth's industrial market is forecast to grow across core products and precincts.
- Dexus is aiming for end-of-year practical completions for projects at Jandakot Airport.
In response to Perth’s limited existing supply, major developers are expected to fulfill the capital city’s demand for industrial properties, according to head of Cushman & Wakefield Industrial and Logistics in WA, Nick Goodridge.
“Institutional developers are seizing their opportunity to meet the burgeoning demand for logistics accommodation in WA, and as major speculative projects near completion, the supply side of the equation is starting to look more opportunistic for occupiers,” said Goodridge.
The state of Perth’s industrial sector
Over the past two years, the median price per building sqm in Perth’s industrial sector has seen a steady increase, with REIWA recording $2,219 as of September 2023.
Commercial property trends
Moreover, Knight Frank‘s Australian Industrial Review Q2 2023 report noted that per annum growth figures in land values have retreated from their 2021 to 2022 highs but are still trending in a positive direction.
In established precincts such as the north and east, the lack of land on the market has made it difficult to assess growth.
However, development in the south and the renewed interest in areas near the Westport development in Kwinana has driven a sustained uptick for small and larger lots.
According to Goodridge, industrial rents in Perth’s industrial market are forecasted to continue to grow across core product and precincts, however at a more moderated rate compared to previous two years, with occupiers becoming more sensitive to sharp rental rises.
Companies are working to find secure accommodation to secure storage for their products, and WA is no exception, but major land constraints and construction delays have resulted in limited availability for new developments.
However, this has resulted in driving the growth of speculative building programs.
“A thriving local economy and remarkably low vacancy rates has led to increased competition among prospective tenants, making it an attractive market for developers to invest in speculative building programs.”
Nick Goodridge, head of Cushman and Wakefield Industrial and Logistics WA
Hazelmere is expected to see two major facilities coming out of the ground with Hesperia developing a 10,000sqm logistics facility facility on Stirling Crescent, and Altis Property Partners having begun work on a proposed 15,000sqm facility on Bushmead Road.
Looking to the south, Centuria will be the first institutional developer to complete a major speculative program, which will be a multi-unit facility located on Bannister Road in Canning Vale with a combined Gross Leasable Area (GLA) of around 12,300sqm.
Dexus is also aiming for a December 2023 practical completion date for two projects at Jandakot Airport, one which will be the largest ever speculative build at 8 Centurion Place of 26,000sqm and another multi-unit estate at Spartan Road with smaller facilities in the 3,000 to 4,000sqm range.