Industrial property analysts report that warehouse rental growth has slowed significantly in 2025, with some markets seeing the first rental decreases since 2021.
Market Conditions
Vacancy Rates
| Market | Vacancy Q2 2025 | Change (YoY) |
|---|---|---|
| Sydney | 2.8% | +0.9% |
| Melbourne | 3.2% | +1.1% |
| Brisbane | 2.4% | +0.4% |
| Perth | 3.8% | +0.7% |
Rental Trends
- Sydney: +2.1% annual growth (vs +15% in 2023)
- Melbourne: Flat to -1% in outer suburbs
- Brisbane: +4.2% (still strongest market)
- Perth: +1.8% annual growth
Contributing Factors
Supply Increases
- Record new construction completions in 2024-2025
- Speculative developments now hitting market
- Reduced pre-leasing activity
Demand Moderation
- E-commerce growth normalising post-pandemic
- 3PLs consolidating facilities
- Some nearshoring manufacturing not materialising
- Tenant cost sensitivity increasing
Implications for Operators
Opportunities
- Improved negotiating leverage for new leases
- Potential for facility upgrades without relocation
- More options for expansion
Considerations
- Landlords offering more incentives
- Longer lease terms negotiable
- Fit-out contributions available
The market shift provides relief for operators who faced significant cost increases over recent years.