2023-03-15-莱坊-Australian_Industrial_Review_February_2023_17页_8mb

Australian Industrial Review - Q4 2022 Summary

Core Content

The Australian industrial market in Q4 2022 continued to show strong performance, driven by high demand and low vacancy rates. While the leasing market remained robust, the investment market saw a shift due to rising funding costs and yields. The market is expected to see a record year of new developments in 2023, particularly in Brisbane, with some signs of moderation in land values and construction costs.

Main Points

Leasing Market

• The leasing market remained very strong, with widespread rental growth due to limited availability of industrial space.
• Vacancy rates across the Eastern Seaboard hit record lows, with 547,748sqm available, marking an 8% fall in the quarter and a 56% drop over the year.
• Sydney, Brisbane, and Melbourne were the top markets with the highest take-up, with Sydney leading in quarterly and annual growth.
• Perth recorded the fastest annual rental growth at 41%, driven by strong tenant demand and rising construction costs.
• Incentives fell slightly, leading to stronger effective rent growth, especially in lower-rent areas like Sydney's Outer West and South West.

Investment Market

• Investment volumes dropped from $23.2 billion in 2021 to $14.2 billion in 2022, reflecting a return to normal levels rather than a loss of appetite.
• Sydney led in investment activity with $5.7 billion traded, followed by Melbourne ($3.7 billion), Brisbane ($1.8 billion), and Perth ($800 million).
• Yields rose by at least 25bps across all markets, but rental growth offset the impact on capital values.
• Prime yields in Sydney rose to 4.6%, while in Perth, they increased by 25bps to 6.3%.

Economic Context

• The economy is showing signs of moderation as higher interest rates take effect, with retail sales volumes contracting by 0.2% in Q4.
• Construction cost inflation began to abate, with shipping and air freight costs falling.
• The RBA is expected to continue raising the cash rate, but global inflation is easing, which may allow for a pause in rate hikes by mid-2023.

Regional Highlights

Sydney

• Vacancy fell by 31% in 2022, reaching 89,192 sqm, with the South West precinct seeing the highest rental growth at 37%.
• Prime and secondary net face rents increased by 29.1% and 24.6% respectively, with the South Sydney market showing the most significant secondary rent growth.
• Developers focused on speculative developments in last-mile locations, with the Outer West leading in pre-commitments.

Melbourne

• Vacancy rates reached a record low of 231,640 sqm, with the West being the most active market.
• Prime rents increased by 20.5% y/y, and secondary rents by 27.9% y/y, though growth in the East and South East was limited.
• Land values remained strong, particularly in the West and North, with some slight declines in the East and South East.

Brisbane

• Annual take-up reached 1.1 million sqm, a record level, with pre-committed space driving the majority of leasing activity.
• Vacancy fell by 14% in Q4 to 219,060 sqm, with the South West and South precincts experiencing the strongest rental growth.
• New developments are expected to exceed 1 million sqm in 2023, though delivery delays may push some projects into 2024.

Adelaide

• Land and rental values continued to rise, with yields softening slightly.
• Demand for industrial assets remained strong, particularly in logistics and transportation sectors.
• Two ground leases were signed for new facilities at Adelaide Airport for DHL and FedEx, indicating strong industrial interest.

Key Information

• Vacancy Rates: Eastern Seaboard vacancy rates reached record lows, with Sydney at 89,192 sqm, Brisbane at 219,060 sqm, and Melbourne at 231,640 sqm.
• Rental Growth: Annual rental growth across major cities ranged from 12% to 41%, with Perth leading at 41%.
• New Developments: 2023 is forecast for a record year of new developments, with Brisbane leading at over 1 million sqm.
• Investment Activity: Cross-border investors remained dominant, with Blackstone, ESR, and PGGM as key players.
• Yields: Yields rose across all markets, with the most significant increases in Perth (25bps) and Brisbane (15bps).
• Construction Costs: Construction cost inflation eased, with the cost of building materials up by 14% over the past year.

Summary Table

Outlook

• The industrial market is expected to continue performing well in 2023, with new developments providing some relief to undersupplied markets.
• Rental growth is anticipated to remain strong, although it may become more nuanced as the market adjusts to the effects of rising interest rates and global economic slowdowns.
• Land values are historically high, with some signs of stabilization, and construction delays may impact the pace of new supply.