The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Interested in a Corporate TUD+ Membership? Access premium content, site tours, event discounts and networking opportunities
Interested in a Corporate Membership? Access exclusive member benefits today
Enquire NowEnquire
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Partner Lab
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
3
print
Print
IndustrialMarisa WikramanayakeTue 19 Apr 22

Industrial Rents at Highest Level in 25 Years

A warehouse worker checks stock as JLL's latest research reports a record increase in industrial rents over the past 25 years.

Industrial rents are at their highest rate in 25 years as investors reposition in the post-pandemic landscape.

Rents in the sector were up in the first quarter of this year by 3.2 per cent compared to the previous quarter, according to JLL.

The last time the sector experienced a lift that high was in June, 1994.

The increase comes after a year-on-year increase of 9.9 per cent on the back of a strong second half of 2021.

There was also double-digit prime net rental growth in 11 of the 21 precincts tracked nationally, and double-digit secondary net rental growth in 16 of them. 

JLL’s head of industrial and logistics Peter Blade said this was due to the kind of demands investors were making about the properties they wanted to rent. 

“The immediacy of demand is driving even, strong rental growth for well-located stock close to major road networks,” Blade said.

“Secondary net face rents have increased by more than 20 per cent in Melbourne’s north and west precincts, and Sydney’s outer central west.”

S&P Global Rankings’ report predicted earlier this year that industrial landlords would turn their attention to logistics.

“Industries supporting the transition to online shopping are thriving," the report said.

"Industrial landlords are riding the wave of demand for logistics services to support growing online consumption.”

Despite a growing demand for industrial sites near major road networks and a rising trend for investors looking for microfullfilment or dark stores, in some areas where there is competition, rents are not growing as strongly.

“There has been little change over the year in Sydney’s outer central west, which includes the rezoned Mamre Road precinct, and Melbourne’s north where land options are more plentiful and developers compete to pre-commit occupiers,” Blade said.

South-east Melbourne has experienced the largest increase in prime net rental growth at 7.9 per cent with southern Brisbane recording the lowest increase at 0.5 per cent.

Sydney’s outer central west recorded the highest increase in secondary net rental growth with 8.3 per cent but Sydney’s inner west area recorded the lowest secondary net rental growth at 1.3 per cent. 

Experts also say that finding land for industrial use within major cities will be increasingly difficult. 

The JLL report comes as the Reserve Bank of Australia noted a major policy pivot to signal the cash rate will start to rise in coming months, indicating that “important additional evidence will be available on both inflation and the evolution of labour costs”.

IndustrialAustraliaSector
AUTHOR
Marisa Wikramanayake
The Urban Developer
More articles by this author
ADVERTISEMENT
TOP STORIES
Exclusive

Brains, Guts and Determination: How Salvo Property Shapes Melbourne’s Skyline

Marisa Wikramanayake
5 Min
Fraser and Partners founder Callum Fraser
Exclusive

Saving Our CBDs: Architect’s Blueprint Paves Way for Office-to-Resi that Works

Leon Della Bosca
8 Min
Exclusive

Watchdog’s Court Loss Throws Spotlight on Union Balancing Act

Clare Burnett
6 Min
Time and Place's The Queensbridge Building at 90 Queens Bridge Street in Melbourne's Southbank.
Exclusive

Innovation Keeps Time & Place’s Southbank Skyscraper Rising

Marisa Wikramanayake
6 Min
Breathe Architecture founder Jeremy McLeod in front of his Featherweight Home design
Exclusive

Nightingale Founder’s Bid for Affordable Architectural Kit Homes

Leon Della Bosca
7 Min
View All >
PBSA DA Hindmarsh Square student accomodation tower
Student Housing

Student-Friendly Adelaide Draws 35-Storey PBSA Proposal

Renee McKeown
Novus on Victoria Chatswood
Build-to-Rent

Novus Plots Second BtR Tower for Chatswood

Renee McKeown
Westmead Gene Technologies Building EDM
Life Sciences

Plans for $272m Parramatta Biomedical Facility Go Public

Clare Burnett
The proposal for the gene therapy precinct at Westmead comes as sector investment continues to ramp up…
LATEST
PBSA DA Hindmarsh Square student accomodation tower
Student Housing

Student-Friendly Adelaide Draws 35-Storey PBSA Proposal

Renee McKeown
3 Min
Novus on Victoria Chatswood
Build-to-Rent

Novus Plots Second BtR Tower for Chatswood

Renee McKeown
2 Min
Westmead Gene Technologies Building EDM
Life Sciences

Plans for $272m Parramatta Biomedical Facility Go Public

Clare Burnett
3 Min
Exclusive

Brains, Guts and Determination: How Salvo Property Shapes Melbourne’s Skyline

Marisa Wikramanayake
5 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/industrial-rents-at-highest-level-in-25-years