Adelaide's industrial property market surges by 20%: Savills

Leasing activity in Adelaide's industrial property market surged nearly 20% in the 12 months to September, buoyed by improving economic conditions.

Data from Savills Australia's Spotlight Adelaide Industrial report showed total space leased - based on leases of more than 700 square metres- rose by 45,698 square metres to 282,352 square metres from 66 deals in the 12 months to September. That compared to the previous corresponding period which recorded a total of 236,654 square metres of stock reported leased from 90 deals.

Leases in the manufacturing and engineering sectors made up the bulk of the industrial leasing activity, accounting for 100,795 square metres of space reported leased, the report said.

The transport and logistics sectors had the most number of leasing deals, with 16 or 24% of the market.

Savills examined Adelaide's five main industrial precincts in the report- the Inner West, North, North West, South and South West.

Of the three precincts, it found that the North, Inner West and South all recorded decreases in leasing activity over the period,  however leasing activity in the North West increased significantly with 143,059 square metres reported leased. The North West registered the greatest number of leasing deals at 30.

Savills also noted that the largest volume of industrial activity took place in the 2,000 to 5,000 square metre categories, closely followed by the 15,000 plus square metre category

Looking ahead, Savills expects the number of leasing deals to remain steady in the short term while the economy continues to recover, increasing in the medium term as a larger number of tenants return to the market.

The report, which also examined sales activity, highlighted that Adelaide’s industrial sector is experiencing "a time of great change” with several major projects, in particular those in the mining and defence sectors, expected to drive growth and investment in the market.

"As these projects become more established we can expect to see an increase in both the number and value of industrial sales and leasing transactions," it said.