- Over 3 million sqm of industrial property leased this year
- Three years of unparalleled growth, says Sass J-Baleh
- Melbourne already surpassed state record
Australia’s Industrial and Logistics sector is on track for another record breaking year for the amount of square meters leased, with the current figure at 3,124,593sqm at the end of September.
This figure is almost 900,000sqm above the square meterage recorded in 2020 at the same time of year, which holds the current full-year record of 3,302,686sqm.
The 2020 record was also unparalleled in that it was the first time the Australian sector surpassed 3 million sqm, shattering the previous 2019 record of 2,785,272sqm.
Sass J-Baleh, CBRE’s Head of Industrial & Logistics Research Australia, said that while occupier take-up had been consistently above the long-term average since 2015, the figures in these past three years are reflective of significant sustained growth.
“Last year was the first time the total national figure exceeded 3,000,000sqm, but in 2021 that number has been passed much earlier, in Q3 rather than in Q4,” Ms J-Baleh said.
Ms J-Baleh expects this year to finish strong, and break the 2020 record considering high leasing activity in typically seen in Q4.
Melbourne leading the charge
Leasing activity has been off the charts in Melbourne, with the Q3 figure already breaking the 2019 full-year record of 1,254,228sqm.
“Melbourne has asserted itself as Australia’s dominant city in 2021, its 1,617,719sqm of transactions accounting for just over 50% of the national take-up, followed by Sydney with 928,487sqm for a further 30%,” she said.
National Gross Take-up by City
According to Ms J-Baleh, retail occupiers including Myer are large contributors to these never before seen figures.
Retailers account for 35% of leasing transactions, due in part to the huge increase in e-commerce activity which reached $51 billion over the past year. During Q1-Q3, E-commerce related occupiers were responsible for 600,000sqm and are expected to reach a million sqm by the end of the year.
Lockdowns continue to accelerate the major growth trends for Industrial & Logistics, as more consumers take their non-discretionary and discretionary shopping online,” Ms J-Baleh said.
Ms J-Baleh added that occupiers are attracted by cheaper average rents in Melbourne than areas in Western Sydney. However, investors are still observing rental growth that comes hand in hand with this growing demand, such as a 3.9% growth year on year.