Quarterly gross take-up rebounds q-o-q to Q2 2024

• Occupier demand increased in the quarter, with gross take-up in Q2 2024 totalling 22,401 sqm. However, this figure is below the average quarterly gross take-up recorded over the last two years (38,229 sqm).
• Despite the increase in gross take-up in the quarter, there is still a lack of occupier moves in the Adelaide market with only four moves recorded in Q2 2024. The largest move was a 10,947 sqm design and construction deal for Woolworths.

No new supply added to the Adelaide market in Q2 2024

• No new supply was added to Adelaide total stock in Q2 2024. However, there are currently 14 major developments under construction totalling 163,497 sqm, with the latest project expected to deliver in Q4 2025.
• The largest project under construction is a speculative development at 75-83 Wilkins Road, Wingfield, totalling 30,723 sqm. Additionally, there are seven projects with plans approved in the future supply pipeline, totalling 108,318 sqm.

Average prime net rents continue to climb in Q2 2024

• Average prime net face rents increased across most precincts in Q2 2024, except the Inner West/East precinct. The continuing trend with occupier demand outpacing supply is resulting in a rise of asking rents.
• Average land values were stable in Q2 2024 as supply for developments sites remain limited in the market. On an annual basis, average land values for 2,000 sqm lots increased between 3.6% and 52.8%.

Outlook: Rental growth expected to accelerate in the short term

• Occupier demand is expected to fluctuate over the short term and speculative supply from developers is likely to remain low as construction material and labour costs remain elevated.
• Low supply, coupled with the T2D project in Adelaide is expected to support ongoing rental growth over the short term. The yield softening cycle is expected to conclude by the end of 2024, reaching a midpoint yield of 6.13%.