February 2016 – Perth Industrial Leasing Market (sub 5,000sqm)

24 February, 2016 / Vanessa Rader and Russ Parham

The Perth Industrial market has been hampered by high levels of vacant stock which has put pressure on both the investment and leasing market.

Analysis on the sub 5,000 sqm market highlights 1,012 properties which are currently available across the Perth
metropolitan area which total 790,488sqm of vacant stock. While the greater state economy continues to be under pressure due to the decline in the mining sector, this has also affected the manufacturing and services sectors directly affecting the industrial property market. There are some positive shoots for the WA economy however,
around the hospitality, tourism and health care sectors improving the current high unemployment position yet not expected to positively impact this part of the property market.

With close to 800,000sqm of vacant stock across the Perth metropolitan area, sentiment has been reasonably low. The interest in purchasing property by SMSF’s looking to divest their investments during this low interest rate environment has stalled while owner occupier businesses are looking more to favourable longer term leasing options during this time of compression in capital values. New supply completions have come to a halt encouragingly allowing the take up of this existing glut of vacant space.
The North is home to the greatest number of vacancies (532) or 367,561sqm, this market is strongly made up of the sub 500sqm size range representing over 300 of these total vacancies most notably in Malaga and Wangara. The East represents the smallest number of vacant spaces (204) however has strong representation of the larger space users with approximately 50,000sqm available in the 1,500–5,000sqm size range. The South features the lowest vacancy in the region: sub 200,000sqm, with more than half the vacancies by numberare in the sub 500sqm size category, the 500–1,000sqm range represent strongly 65 properties being 47,250sqm.

The number of vacant properties in the sub 1,500sqm size range is at 875 or 448,093sqm, this is up from our last analysis in late 2014 where 724 or 402,161sqm were recorded. Like those results, there is a large component in the 0–500sqm size range representing 522 or 144,409sqm, followed by the 500–1,000sqm size range which features a further 251 properties being 178,985sqm. This period however, has included the larger size range of 1,500–5,000sqm which represents 136 vacancies and a total of 342,396sqm, most notably in the North and East.