Perth industrial and logistics demand up in 2Q22
PERTH, September 7, 2022 – Demand for industrial and logistics commercial properties is increasing as Western Australia’s economy rebounds from the COVID era, according to the latest research from JLL.
Second quarter figures from global property services group, JLL, show Perth’s industrial and logistics property market recorded 66,600 sq m of take-up in 2Q22, with demand exceeding the two-year quarterly average of 48,300 m².
The transportation and logistics sectors led commercial tenant activity, contributing 25.8% of industrial demand for real estate over the past 12 months, followed closely by the manufacturing sector with 21.1% of Requirement.
Nick Goodridge, Head of Industry and Logistics (WA) at JLL said the growth in demand for commercial goods for logistics use was due to the growth of e-commerce and a general expansion of industrial activity in WA.
“Demand remained firmly elevated in the first half of the year, with signs of demand picking up in the second half,” Mr Goodridge said.
“The logistics sector continues to lead the majority of the current survey, with ever-increasing shifts in consumer consumption habits driving increased e-commerce activity and real expansion mandates across a range of industrial sectors.
Mr Goodridge said the revival of the state’s manufacturing sector that began in 2021 accelerated in the first half of 2022.
“The share of demand from the manufacturing sector has increased from 14.1% in 2021 to 21.1% currently. This has been spurred by the resource and construction sectors, creating a need for local manufacturers, such as steel and alumina fabricators, to increase their footprint.
JLL foresees a tightening of the commercial real estate stock in the short to medium term, which will result in historically low vacancy rates and a rapid increase in rents.
“This has resulted in a large number of tenant files currently on the market, with our team now managing over 100,000m² of vetted tenant files on the market at this time, with occupiers looking for existing and pre-let facilities ranging from 4,000 sq. ft. to 30,000 sq. ft.,” Mr. Goodridge said.
Due to significant supply pressures over the past 18 months, occupants were considering design and construction options to meet their needs.
“In addition to the pre-lease market, we are in the early stages of an emerging speculative construction cycle in WA, which has not traditionally been a strategy for local developers,” he said.
“We see real benefit in having a premium product available to let by Q3 2023 based on current occupant demand and an extraordinarily low vacancy rate.”