Strength in occupier demand

• Occupier demand improved 30.0% over the previous quarter, reaching 26.1% above the 10-year quarterly average.
• Leasing activity was driven by the manufacturing sector, with 50.2% of the area leased. This was the highest proportion for this sector since Q3 2019.

Completions remain elevated

• In Q4 2024, approximately 198,100 s.m. of new industrial stock was completed in Sydney, with 77.2% located in the Outer Central West.
• JLL is tracking around 769,900 s.m. of supply currently under construction, of which 42.1% is pre-committed. The majority of this supply will be delivered to the Outer Central West (49.3%) and Outer South West (26.3%).

Mixed rent growth with increasing incentives

• Rent growth was mixed in Q4 2024, with the inner precincts remaining flat and the Outer Western precincts recording between 2.2% (Outer Central West) and 2.6% (Outer North West) quarterly growth.
• We recorded AUD 1.56 billion in sales transactions in Q4 2024, over double the volume from the previous quarter. This brought the annual transaction volume to AUD 5.3 billion, a record result for the Sydney industrial market.

Outlook: stability in rents and yields

• We anticipate face rent growth to remain constrained but positive over the next 12 months, as vacancy-averse landlords negotiate incentives to secure tenants.
• Further stability in investment yields is expected over the next 12 months, with a possible rate cut decision by the RBA in 2025 likely to give greater confidence that the next movement in yields will be a compression.