2026-07-10-莱坊-Sydney_Industrial_State_of_the_Market_Q2_2026_8页_1mb

Sydney Industrial Market Summary - Q2 2026

Core Content Overview

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

Main Points

Leasing Overview

• Prime industrial rents remain stable across all precincts in Q2 2026, with Western Sydney net face rents ranging between $200 - $300/sqm.
• Tenant demand is heavily concentrated in Western Sydney, with Outer West and South West accounting for 82% of total leasing take-up.
• Vacancy levels dropped slightly to c.738,000 sqm, with speculative developments making up 42% of total availability.
• New supply in 2026 is expected to reach c.650,000 sqm, with 43% delivered in H1 2026.

Investment Overview

• Transaction volumes totalled $1.12 billion in H1 2026, with confidence remaining strong despite lower volumes than previous years.
• Major transactions include:
  • Aliro Group acquiring two Goodman assets for $438 million.
  • Centuria selling a cold storage facility at 67-69 Mandoon Road, Girraween for $98 million.
• Prime yields range between 4.75% - 5.75% across Western Sydney, with yields remaining stable over the quarter but tightening slightly year-on-year.

Key Precinct Insights

Outer West

• Leasing take-up in H1 2026 totalled 175,475 sqm, driven by existing space (74%) and speculative take-up (16%).
• Prime net face rents remained stable at $220-250/sqm.
• Vacancy stood at 367,493 sqm in Q2, representing 76% of total new supply forecast for 2026.
• Prime incentive averaged 23%, up 160 bps year-on-year.
• Prime yield averaged 4.75–5.75%, with a slight tightening of 6 bps year-on-year.
• New supply is expected to reach 367,493 sqm by year-end, with 76% being speculative space.

South West

• Leasing take-up in H1 2026 totalled 72,708 sqm, driven by existing space (56%) and pre-commitments (35%).
• Prime net face rents remained stable at $220-250/sqm.
• Vacancy dropped to sub 200,000 sqm, with speculative developments accounting for 40% of vacancy.
• Prime incentive averaged 23%, up 130 bps year-on-year.
• Prime yield averaged 4.75–5.75%, with a tightening of 10 bps year-on-year.
• New supply is expected to reach 165,600 sqm by year-end.

Inner West

• Leasing take-up in H1 2026 totalled c. 51,000 sqm, driven by take-up of speculative stock.
• Prime net face rents averaged $220-300/sqm, with incentives averaging 20%.
• Vacancy stood at 145,947 sqm in Q2, with the majority being speculative space.
• Prime yield averaged 4.75–5.50% for prime and 5.50–6.50% for secondary.
• New supply forecast for 2026 is 105,000 sqm, all completed.

South

• Leasing take-up in H1 2026 totalled 5,000 sqm, reflecting moderate tenant demand.
• Prime net face rents remained stable at $405/sqm.
• Vacancy was reported at 57,000 sqm in Q1, with incentives averaging 17.5%.
• Prime yield averaged 4.50–5.00%, stable over the quarter and year-on-year.
• New developments in 2026 are all completed, with Stockland's Momenta being 50% pre-leased.

Key Trends

• Leasing activity is heavily concentrated in Western Sydney, particularly in Outer West and South West.
• Transport/logistics and manufacturing occupiers accounted for 56% of leasing activity in 2026 YTD.
• Speculative developments continue to play a significant role in both vacancy and supply, making up a large portion of available space in all precincts.
• Prime yields have remained stable across the market, with some tightening observed in certain areas.
• Major development completions include Stockland Momenta in Banksmeadow, ESR's Birmingham Industrial Park, and Goodman's Chullora Industrial Hub.

Data Digest

• Prime Grade assets are modern, well-maintained, with office components between 10-30%.
• Secondary Grade assets are older, in reasonable or poor condition, with office components between 10-20%.
• Take-up refers to the absorption of existing assets, speculative developments, or pre-commitments.

Methodology

• Vacancy data includes:
  • Existing Buildings – existing buildings for lease.
  • Speculative Buildings – buildings for lease which have been speculatively constructed and are vacant.
  • Spec. Under Construction – buildings for lease being constructed and will be available within 12 months.

Contact Information

• Research & Consulting: Ben Burston, +61 2 9036 6756, ben.burston@au.knightfrank.com
• Capital Markets: Michael Kwok, +61 2 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, +61 2 9036 6663, jack.needham@au.knightfrank.com