Uptick in quarterly gross take-up quarter-on-quarter to Q3 2024

• Occupier demand continued to increase in the quarter, with gross take-up in Q3 2024 totalling 49,600 sqm. This figure is above the average quarterly gross take-up recorded over the last ten years (38,600 sqm).
• There are still a lack of occupier moves in the Adelaide market, with only six large occupier moves (>3,000 sqm) recorded over Q3 2024. The largest move was a 15,480 sqm pre-lease deal for PepsiCo.

Rebound in new supply to Adelaide market in Q3 2024

• There was 25,400 sqm of new supply added to Adelaide total stock in Q3 2024. Currently, there are 12 major developments under construction totalling 159,000 sqm, with the latest project expected to deliver in Q4 2025. 66.7% of these projects are pre-committed.
• The largest project under construction is a pre-lease development at 1-4 Enterprise Drive, Salisbury South, totalling 26,000 sqm. Additionally, there are seven projects with plans approved in the future supply pipeline, totalling 114,100 sqm.

Average prime net rents to continue increasing

• Average prime net face rents increased across most precincts in Q3 2024, except the Inner West/East precinct. The rise in asking rents is a result of the continuing trend with occupier demand outpacing supply.
• Average land values increased in Q3 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 14.3% and 42.9%.

Outlook: Rental growth to expand in the short term

• Occupier demand is expected to continue fluctuating over the short term as tenants are reluctant to make decisions during ongoing economic uncertainty. Speculative supply from developers is likely to remain low as construction material and labour costs remain elevated.
• Low supply, coupled with a major infrastructure project which has displaced many businesses, is expected to support ongoing rental growth over the short term. The yield softening cycle is forecast to conclude by the end of 2024, reaching a midpoint yield of 6.25%.