Industrial property leasing on the upturn: Savills

Industrial property leasing nationally over the 12 months to March 2015 is up nearly 40% annually, according to Savills national head of research, Tony Crabb.

"The data confirmed the recent upswing in the market and, with Melbourne and Sydney accounting for 66% of the transactions in square metre terms, also provided further evidence of the economic shift to the non-mining states," said Crabb.

"It’s a good news story for Sydney and Melbourne, and while Brisbane has fared remarkably well Perth has not, but it’s important to note that this is a cyclical rather than a structural phenomenon and one which WA will recover from, indeed a spate of recent leasing deals would suggest some green shoots of recovery already."

The data reveals 2,222,163 square metres of industrial space was leased in the year to March, or more than 600,000 square metres above the corresponding period to March 2014. The five year average is 2,406,514 square metres.

At 714,977 square metres reported leased, Melbourne’s figure was up a remarkable 460,000 square metres on last year (255,783 square metres) while Sydney recorded 757,474 square metres of space leased compared with 659,000 square metres in the previous period.

Over in the west, by contrast, Perth recorded a total of 144,926 square metres leased, down more than 45% on the 264,744 square metres recorded to March 2014, while in the other key resources state, Brisbane (485,286 square metres) was up a surprising 70% (283,802 square metres to March 2014).

Savills’s national head of industrial, Darren Curry, said the gradual shift of activity to the non-mining states was progressing as expected.

"And we’ll continue to see that trend over the coming 12 months driven by key players in the transport and logistics sector and especially the warehousing requirements of onlines and new international retailers such as H&M and Uniglo, among others, along with new requirements from key players such as IKEA," Curry said.

Source: Savills