ISSUE 188 | FEBRUARY 2026 | 02 9630 8000 | PAGE 9 MARKET INSIGHT SPECIAL Profit Margin Pressure and Declining Productivity Impacting Industrial Property Demand Bawdens is Sydney’s leading SME-focused industrial property specialist. The firm, with $3.5 billion in assets under management, routinely releases unique research papers for the benefit of its clients and customers. In this issue, we bring together the findings from recent papers that revealed how interest rates affect industrial sales and how to correctly price industrial property in 2025, to reveal how profit margin performance and productivity are critical to market stability. Since 2024, despite interest rates falling from about 7.4% to about 6%, sales at the firm as a percentage of all deals fell from 22% to 15%. Since 2023, despite inflation falling from 7.0% to 2.4% in 2025, business confidence has noticeably declined. The decline in confidence can be understood as the outcome of the lag effects of increasing costs to businesses from the inflation experienced in 2023 and falling productivity today. Businesses are currently seeing this in their financial statements as falling profit margins. Correctly pricing property to meet current conditions will remain very important for successfully leasing or selling in 2025 and 2026. Strong Demand for Blacktown’s Freestander Relocating from Smithfield, Taihe Group Pty Ltd has secured a freestanding warehouse at 5 Chicago Avenue, Blacktown. This 677m² property offers warehouse space plus a small undercover area. It has been leased on a 3 + 3 year term at the asking rental of $135,000 pa net + outgoings and GST, which reflects $200 per square metre. This deal was successfully completed by Bawdens Director Terry Saba and Sales & Leasing Executive Monjer Khan. BAWDENS NEWS YLEASED BY
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