Australia’s industrial and logistics property market remains one of the tightest globally, despite a modest rise in the national vacancy rate to 2.8 per cent in the first half of 2025, according to CBRE’s latest Industrial & Logistics Vacancy Report.
The report highlights a gradual increase in vacancies across the major Eastern Seaboard cities, with Sydney rising to 2.4 per cent, Melbourne to 4.1 per cent and Brisbane to 3.2 per cent. In contrast, Perth saw a decline from 1.4 per cent to 1.2 per cent, while Adelaide held steady at 1.6 per cent.
Sass Jalili, CBRE’s Head of Industrial & Logistics and Data Centre Research Australia, noted that the national trend aligns with expectations and remains below the 4 per cent equilibrium threshold. “Sydney and Brisbane have seen more gradual increases, while Melbourne continues to show a split market, with tight conditions in the Southeast and East and higher vacancies elsewhere,” Jalili said.
Sublease availability has shifted slightly, increasing in Perth and Adelaide, while Sydney’s share dropped below 20 per cent of total vacancy. Jalili emphasised that constrained supply of zoned industrial land, coupled with e-commerce growth and population expansion, will continue to drive long-term demand.
Michael O’Neill, Regional Director Pacific Industrial & Logistics, reported stronger transactional activity in Q2, spurred by more competitive leasing terms. “Vacancy rates are expected to remain below 4 per cent nationally in the second half of 2025, particularly in infill markets,” he said.
City Highlights
- Sydney: Vacancy rose to 2.5 per cent, with the Inner Southwest seeing the largest increase. Sublease availability dropped to 18 per cent. Tom Rourke, CBRE’s Head of Western Sydney Industrial & Logistics, noted stable rents and increased tenant choice due to new developments in areas like Kemps Creek.
- Melbourne: Vacancy climbed to 4.3 per cent, with sublease space concentrated in the West. Thomas Murphy, CBRE State Director, cited elevated supply and subdued demand as key factors, though super-prime assets are expected to outperform.
- Brisbane: Vacancy increased to 3.2 per cent, driven by large speculative developments. Sublease space remains low at 5 per cent. Matthew Frazer-Ryan, CBRE State Director, expects improved leasing activity in the coming months, supported by Brisbane’s cost advantage.
- Perth: With the lowest vacancy rate nationally at 1.2 per cent, Perth continues to benefit from strong population growth and economic momentum. Jarrad Grierson, CBRE Senior Director, anticipates more backfill space as pre-leases convert to occupancy.
- Adelaide: Holding steady at 1.6 per cent, Adelaide saw a rise in sublease activity, now at 13 per cent of total vacancy for larger assets. Paul McKay, CBRE State Director, said demand remains steady, though turnover is down due to limited alternatives.
As Australia’s industrial market enters a phase of normalisation, CBRE expects momentum to build in the second half of 2025, with vacancy rates remaining tight and transaction volumes increasing.