INSIDE THIS ISSUE OF INDUSTRIAL PROPERTY NEWS We examine business formation – a key indicator of confidence and overall economic health in Sydney. ISSUE 189 | MARCH 2026 | 02 9630 8000 | PAGE 2 Ben Rodriguez: Director Asset Management, Esperance Saad: Associate Director Asset Management, Terry Saba: Director and Robert Ally: Director MARKET INSIGHT SPECIAL Profit Margin Pressure Not Affecting SME Formation Bawdens is Sydney’s largest industrial and commercial property sales and leasing specialist. As a specialist, we complete various detailed analyses of the activities of Small Medium Enterprise (SME) businesses during any business period. In this issue, we look at business formation. This measure can provide an indication of confidence and economic health in Sydney. Formation of a new business or growth in an existing small business can be identified as being any sale or lease transaction with a gross lettable area (GLA) of less than 250m². The graph below reveals that as a percentage of all transactions completed by the firm between 1 July 2025 and 31 December 2025, some 53% had a building area of 250m² or less, satisfying our business formation or growth criteria. Despite SME profit margin pressure during the period, SME business owners continued to act with confidence. Interestingly, the issue of profit margin pressure can be observed in the reduced activity of older but aspirational businesses leasing or purchasing space between 251m² and 1000m². The study data revealed businesses seeking or using space between 500-1000m², in particular, reduced activity whilst they focused upon profit margin recovery in the study period. Older businesses using more than 1000m² of space exhibited consistent confidence throughout the study period.
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