2026-04-23-莱坊-Sydney_Industrial_State_of_the_Market_Q1_2026_8页_1mb

Sydney Industrial Market Summary - Q1 2026

Core Content Overview

This report provides a detailed quarterly update on the Sydney industrial market, focusing on leasing activity, investment trends, vacancy rates, and rental dynamics across key precincts: Outer West, South West, Inner West, and South.

Key Trends

Leasing Activity

• Leasing Volumes: Total leasing take-up in 2025 reached 1.3 million sqm, up 36% year-on-year (y/y), driven by large pre-commitments.
• Take-up Distribution:
  • Outer West: 705,000 sqm (44% above 2024), with 65% from existing space and 27% from pre-commitments.
  • South West: 430,000 sqm (33% of total Sydney leasing volume), with 33% transport/logistics, 30% manufacturers, and 27% retailers.
  • Inner West: 118,184 sqm, with retailers accounting for 31% of activity.
  • South: 30,000 sqm, significantly below the three-year average.

Vacancy Rates

• Vacancy Increase:
  • Outer West: 605,000 sqm in Q1 2026, up 60% y/y.
  • South West: 232,624 sqm in Q1 2026, representing 29% of total vacancy.
  • Inner West: 143,857 sqm in Q1 2026, accounting for 18% of total vacancy.
  • South: 84,000 sqm in Q1 2026.

Rent and Incentives

• Prime Net Face Rents:
  • Outer West: $200 - $250/sqm, stable q/q and y/y.
  • South West: $200 - $250/sqm, stable q/q and y/y.
  • Inner West: $220 - $300/sqm, stable q/q and y/y.
  • South: $405/sqm, stable q/q and y/y.
• Incentives:
  • Outer West: 23%, up 160 bps q/q and 390 bps y/y.
  • South West: 23%, up 130 bps q/q and 330 bps y/y.
  • Inner West: 20%, up 413 bps y/y.
  • South: 17.5%, up 250 bps q/q and 750 bps y/y.
• Net Effective Rents:
  • Western Sydney: Declined by 4.6% over the last 12 months due to rising incentives, reaching a historical high of 22%.

Investment Activity

• Investment Volumes: Total transaction volumes in 2025 reached $4 billion, with a slower start in Q1 2026.
• Prime Yields:
  • Western Sydney: Ranged between 4.75% - 5.75%, with a tightening of 19 bps y/y.
  • South West: 5.4%, stable q/q, tightening 23 bps y/y.
  • Inner West: 5.1%, stable q/q, tightening 13 bps y/y.
  • South: 4.9%, stable q/q and y/y.
• Recent Transactions:
  • Aliro Group: Acquired two assets in Greenacre and Pemulwuy for $438 million.
  • Realterm: Purchased 5-9 Lancaster St, Ingleburn for $39.8 million.
  • Busways: Acquired 32 Sargents Rd, Minchinbury for $77.5 million.
  • Centenial: Purchased 6 Ash Road, Prestons for $29.75 million.

Supply and Development

• New Supply Forecast:
  • Western Sydney: 331,611 sqm in 2026, representing 60% of total new supply.
  • South West: 87,000 sqm in 2026, with 20% of total new supply.
  • Inner West: 105,000 sqm in 2026, driven by Hale Capital's developments.
  • South: 11,000 sqm in 2026.
• Development Activity:
  • 2025: 442,000 sqm delivered, with 2026 forecast at sub 100,000 sqm.
  • 2026: New supply is expected to be lower than 2025.

Market Indicators

Property Grades

• Prime Grade: Modern design, good condition, and utility with an office component of 10-30%. Located in established industrial precincts with good access.
• Secondary Grade: Older design, in reasonable or poor condition, inferior to prime stock, with an office component of 10-20%.

Summary of Key Highlights

• Leasing Volumes: Strong in 2025, with Outer West and South West accounting for 89% of take-up.
• Vacancy Rates: Reached new highs in Q1 2026, particularly in Outer West (up 60% y/y).
• Incentives: Continued to rise, reaching a historical high of 22% in Western Sydney.
• Rental Growth: Stalled in South due to high incentives, while other precincts maintained stable net face rents.
• Yields: Remained steady or tightened slightly across all precincts, with prime yields in the range of 4.75% - 5.75%.
• Investment Activity: Slightly slower in Q1 2026, but expected to increase with ongoing campaigns.

Contact Information

• Research & Consulting:

  • Ben Burston: +612 9036 6756, ben.burston@au.knightfrank.com
  • Marco Mascitelli: +612 9036 6656, marco.mascitelli@au.knightfrank.com
  • Naki Dai: +612 9036 673, naki.dai@au.knightfrank.com

• Capital Markets:

  • Michael Kwok: +612 9036 6620, michael.kwok@au.knightfrank.com

• Industrial Logistics, NSW:

  • Orlando Maciel: +612 9036 6728, orlando.maciel@au.knightfrank.com

• Valuation & Advisory, NSW:

  • Jack Needham: +612 9036 6663, jack.needham@au.knightfrank.com