Near term occupier demand is likely to be stronger than the underlying economic conditions with some companies actively looking for additional storage space, to allow them to store higher inventory levels to manage supply chain disruptions. Public sector investment in road projects is expected to continue over the short term. This has indirect benefits through changes in the accessibility of different industrial areas and could boost gross leasing demand. Following the completion of the Regency Road to Pym Street section, work on the North-South Corridor project continues with preparations for the final stage – the 10.5 km Torrens to Darlington Project – underway. This section, which provides a bypass to twenty-one intersections, is set to further enhance transport links. Construction is likely to be delivered in stages, with final completion expected in 2030. As companies relocate to take advantage of road improvements – particularly in the logistics sector – they will leave behind secondary space in the more established and centrally located areas. In some cases, sites may be lost to industrial use, being withdrawn for residential redevelopment, but in other cases premises left behind could add to vacancies. As with other locations, we expect upgrader demand in Adelaide to continue over time as business move to newer, more efficient premises, incorporating technological advancements. In addition, private sector spending is occurring in the energy and the transport and logistics industries. Solar and battery storage investment is being undertaken to ensure the state’s energy supply remains stable. Increases in online spending have driven demand for additional (largely prime) warehouses for fulfilment centre conversions, not a trend unique to Adelaide. Leasing outlook 21 Industrial Market Monitor | 2nd Half 2022
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