PERTH Perth prime industrial market indicators Perth Eastern Net face rent ($ sqm) 135 Incentive (%) 1.5 Yield (%) 5.4 Capital value ($ sqm) 2,500 Leasing demand for industrial properties in Perth was strong last year, buoyed by the release of pent-up demand from delayed decisions during the pandemic, but also the relative strength of the West Australian economy. Actual gross take-up across the metropolitan area during 2022 was lower than in 2021, hampered by extremely low vacancy rates across the regions. Demand for industrial space in Perth is coming from a broad range of occupiers, most notably transport & logistics, companies servicing the mining and construction sectors, manufacturers as well as retailers (both pure play and omnichannel) servicing consumer demand. The most aggressive competition for space last year (which has continued into this year) is for options less than 3,000 square metres in area, with less intense demand for larger buildings. Strong occupier interest from both tenants and owner occupiers, but a shortage of available stock is constraining both user groups. The desire to occupy additional space to store higher inventory levels has eased in Perth over the last six months, with many businesses looking to expand to keep pace with servicing growing local demand. Vacancy rates across the Perth metropolitan area have dropped to less than 0.5% at December 2022, with the strength of demand outstripping modest completions. The market tightness is evident across the East, South and North, with little existing space available to lease. Reflecting the rapid tightening in the market last year, average prime rents rose rapidly across the regions during 2022. In the benchmark East, average net stated prime rents increased by circa 30% over 2022 to $135 per square metre. Prime rents in the North and South also reached a similar level by December last year. Leasing incentives fell at a rapid pace during 2022 as the swift recovery in the leasing market flowed through. At December 2022, prime incentives in the benchmark East were 0 to 3%, at an average 1.5%. that some institutional owners are offering incentives up to 7% for new builds with precommitment rents less than existing prime space, but many tenants are not able to wait for new supply to be delivered. Leasing market 22 Industrial Market Monitor | 1st Half 2023
RkJQdWJsaXNoZXIy MTI3ODI1