2021-08-14-莱坊-Australian_Industrial_Review_August_2021_17页_8mb

Australian Industrial Review Summary

Core Content

The Australian industrial and logistics real estate market has experienced a significant surge in demand, driven primarily by the growth of e-commerce and supply-chain investments. This has resulted in record take-up volumes, record low vacancy levels, and sharp yield compression across major cities such as Sydney, Melbourne, Brisbane, Adelaide, and Perth. Investor appetite has intensified, with landmark portfolio transactions setting new benchmarks for the sector and pushing yields to historic lows.

Main Points

• E-commerce Growth: The pandemic has accelerated e-commerce usage, increasing online retail share of total retail turnover to around 9.2% since December 2020. This has significantly boosted demand for warehouse and distribution space.

• Demand Surpasses Supply: Record take-up volumes and declining vacancy rates are pushing the market into a tight supply-demand balance. The East Coast, particularly Sydney and Melbourne, has seen the most dramatic drops in vacancy.

• Yield Compression: Prime yields have compressed by 25–50 bps nationally, with Sydney and Brisbane experiencing the largest reductions. Super prime yields are now at 3.50–4.00% in Sydney and 4.00–4.50% in Brisbane.

• Land Value Increases: Land values are rising across all major cities, with Sydney, Brisbane, and Melbourne seeing the most notable growth. Institutional investors are driving this trend by seeking land for speculative development.

• Development Pipeline: New industrial development is expected to reach a record high, with over 2.2 million sqm of new supply forecast for 2021 on the East Coast, and a significant portion of this development is pre-committed by tenants.

• Investor Activity: There has been a surge in investment activity, with landmark transactions such as Blackstone's A$3.8 billion portfolio sale to ESR and GIC. This has validated the high demand for industrial assets and set new yield benchmarks.

• Leasing Trends: Leasing activity has increased substantially, with the Transport/Logistics and Wholesale Trade sectors accounting for the majority of take-up. In Sydney, these sectors represented 73% of leasing activity in Q2.

• Regional Highlights:

  • Sydney: Vacancy dropped 47% Q/Q to 219,503sqm, with prime rents increasing by 1.1% and incentives falling by 15–18%.
  • Melbourne: Take-up increased 56% Q/Q to 301,967sqm, with prime yields compressing by 25 bps to 4.00%.
  • Brisbane: Land values for 1–5ha lots rose 19.5% Y/Y, and vacancy declined 9% Q/Q to 545,435sqm.
  • Adelaide and Perth: Land values have increased due to heightened competition and limited supply, with yields tightening by 38bps to 5.00%.

• Supply Chain and Automation: Businesses are investing in automation and expanding their storage and distribution capabilities to meet rising e-commerce demand, further increasing the need for industrial space.

• Future Outlook: The market is expected to continue its strong performance with sustained high occupancy rates, rising returns, and continued yield compression. The development pipeline is robust, with a focus on larger, more modern facilities.

Key Indicators (Q2 2021)

Summary of Regional Highlights

Sydney

• Vacancy: Fell 47% Q/Q to 219,503sqm, the lowest on record.
• Leasing: 516,498sqm leased in Q2, with Transport/Logistics and Wholesale Trade accounting for 73% of take-up.
• Rents: Prime rents increased by 1.1% Q/Q, with incentives falling by 15–18%.
• Development: Over 200,000sqm of pre-commitments, with 583,709sqm expected to be delivered by year end.

Melbourne

• Vacancy: Declined 21% Q/Q to 714,115sqm, with 70% of developments in the pipeline pre-committed.
• Leasing: 672,969sqm leased in Q2, with Transport & Warehousing being the most active sector at 29%.
• Rents: Prime rents increased by 2% and 1% in the South East and West respectively.
• Development: 1.16 million sqm of new supply expected in 2021, with the West and South East leading the way.

Brisbane

• Vacancy: Declined 9% Q/Q to 545,435sqm, with secondary space accounting for 66% of take-up.
• Leasing: 280,215sqm leased in Q2, with Retail Trade as the most active sector at 25%.
• Land Values: 1–5ha lots rose 19.5% Y/Y, and land values for <5,000sqm lots increased 12% Y/Y.
• Development: 427,540sqm expected to be delivered in 2021, with speculative supply at 46%.

Conclusion

The Australian industrial and logistics market is undergoing a transformation driven by e-commerce growth and supply-chain investments. This has led to record take-up volumes, sharp yield compression, and rising land values. With continued demand and a robust development pipeline, the sector is positioned for sustained performance and further investment inflows.