APPD Market Report Article


November 29, 2022

Annabel McFarlane, Senior Director - Research, Australia


AUD 106


Occupier demand slows in 3Q22

  • Leasing activity significantly decreased over the quarter, recording the lowest quarterly total in more than a decade. Gross take-up decreased by 82.5% q-o-q in 3Q22.
  • There was one major occupier move (>3,000 sqm) recorded, totalling 6,063 sqm in Adelaide’s North West precinct.

Supply limits restrict leasing activity in 3Q22

  • There were two completions over the quarter, totalling about 11,500 sqm. The food meal prep business, Lite and Easy, completed an owner-occupied facility in Adelaide’s North West, and Vaughan Constructions completed a design & construct facility for food manufacturer, La Casa Del Formaggio.
  • Additionally, about 82,300 sqm of industrial supply is currently under construction and is expected to complete in 2022.

Average prime rents increase further

  • Average existing prime rents increased between 2.4%-8.1% q-o-q, depending on the precinct.
  • Prime midpoint yields were broadly unchanged, only softening in the North West precinct by 12.5 bps q-o-q. There were 18 major transactions recorded over the quarter, totalling AUD 464.8 million.

Outlook: Adelaide industrial yields start the decompression cycle

  • Yields are expected to soften as they stabilise from a cyclical low.
  • Rents are expected to increase further as occupier demand continues to outpace supply.

Note: Adelaide Logistics & Industrial refers to Adelaide's industrial market (all grades).

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