Australian Industrial Horizons

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LOGISTICS & INDUSTRIAL RESEARCH | INDUSTRIAL HORIZONS

INTRODUCTION

The Australian industrial land market has shown resilience over the past two years despite economic uncertainties. Land absorption volumes have remained solid, driven more recently by elevated levels of speculative development, and as a result, industrial land stocks have been reduced across all markets. The undersupply of land remains a real issue within the sector, hampered further by authority approval delays and an elongated servicing process. In 2024, land take-up levels have eased; however, in a number of states, this reflects the uncertainty in delivery timeframes given servicing and infrastructure challenges. Highlighting this has been the sharp drop in pre-lease transactions in 2024, which only accounted for 15% of lease deals nationally compared to the 2020-2023 annual average of 36%. Once these constraints are worked through and resolved, not only will the active land supply pipeline increase, so too will land take-up volumes. • Quantify how much vacant industrial zoned land remains across each capital city, including splits between active* and inactive supply. • Determine how many years of industrial zoned land supply remains, based on recent take-up trends. While overall land stocks may appear plentiful, the reality is that a large share of this land is unserviced or unlikely to be ready for development during the current cycle. Based on recent take-up trends, our analysis shows there are 5.0 years of active land supply remaining nationally. However, there remains a large share of active land stocks in private ownership, which will reduce this total to closer to 3.0 years given their inability to deliver developed stock into the market. The land supply issue that emerged in 2021 and 2022 has been somewhat masked over the past two years due to a softer economy. With a return to stronger economic conditions forecast for 2025, this issue will likely resurface. Further, while additional zoned land may be made available, the timeframe to service this land can be substantial. The purpose of this study was to:

Active Industrial Land Stocks by City

BRISBANE 942 ha

National 3,520 ha

PERTH 507 ha

SYDNEY 828 ha

ADELAIDE 166 ha

MELBOURNE 1,077 ha

* See page five for the definition of active land supply