Sydney Industrial Market Dynamic Q3 2024

Gross take-up levels across Australia remain robust in Q3 2024 and weighted to leases and absorption of sublease space within existing warehouses. However, the logistics occupier market has changed over the course of this year. Many larger 3PL companies are still rightsizing distribution networks down from elevated levels maintained over the last four years, in line with eCommerce demand normalising.

Increasing vacancy and incentives in key precincts is slowing face rental growth and creating downward pressure on effective rents. However, investor confidence in long-term growth fundamentals resulted in AUD 2.24 billion in transaction volumes in the Australian industrial sector, in Q3 2024. This is the fourth consecutive quarter of volumes above the 10-year average.