INSIDE THIS ISSUE OF INDUSTRIAL PROPERTY NEWS Bawdens share insights on how profit margin performance and productivity are critical to market stability. ISSUE 186 | NOVEMBER 2025 | 02 9630 8000 | PAGE 2 Ben Rodriguez: Director Asset Management, Esperance Saad: Associate Director Asset Management, Robert Ally: Director and Terry Saba: Director 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 (see page 12), 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.
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