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Industrial Rents Tipped To Surge
July 20, 2023 jun Strategy Session


Tight vacancy rates and ongoing high demand are likely to see more upward pressure on industrial rents.


Recent analysis by CBRE predicts a sharp escalation in rents for prime warehouse space in Australia’s capital cities, warning occupiers to anticipate another double-digit increase over the next year.


CBRE found that industrial property with a vacancy rate under 4% experienced an average rent rise of 14.2% year-on-year. Meanwhile, cities with a higher vacancy rate, above 4%, recorded less than half this increase, averaging 6.5%.


With the lowest industrial vacancy rate in the Asia Pacific region, Australia recorded an average of just 0.6% for prime space in the first quarter, compared to the regional average of 7.1%.


The scarcity of space is most acute in Sydney and Perth, which have the nation’s lowest vacancy rates at 0.3% and 0.4% respectively.


These ultra-low rates, driven by surging demand from the e-commerce sector and low supply because of construction delays and zoning issues, have contributed to a 27% rent increase over the past year.




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