Perth’s industrial property sector is currently witnessing its longest period of sustained growth in history, reflecting broader changes in global supply chain dynamics and a resilient local economy.

Previously, the sector saw exponential growth between 2006 – 2008, but this boom was short-lived, lasting only 18 months before the market fell off the proverbial cliff.

For 12 years, almost two normal property cycles since then, the market remained stagnant, showing no real rental growth and only sporadic tenant demand.

However, the aftermath of the pandemic marked a paradigm shift in industrial property markets globally, as supply companies realised the need for more effective supply chains and larger inventory holdings.

In a market like Perth, the most isolated capital city in the world, the increase in demand for warehousing was colossal.

As a result, investors began to view industrial property as a safe haven, driving a boom that has now entered its fourth year and shows no signs of slowing.

Industrial rents have surged by approximately 40% since 2020, and despite 13 interest rate hikes, investor demand remains strong, with increased borrowing costs more than offset by record rental increases.

The vacancy rate remains low at about 2%, and investment yields for industrial property are currently sitting at around 5.75% - 6.25%, with strata titled properties selling at slightly higher rates.

One might wonder what the market might have looked like without the interest rate increases. As we look to 2024/25, it’s essential to consider the broader economic predictions.

Economists anticipate that interest rates will stabilise in the first half of the year, with potential cuts in the latter half.

However, if China faces a credit squeeze due to the failure of large property developers, it could slow the economy and reduce demand for Australian iron. Most economists believe that the Chinese government will continue to support the banks over the next 12 months.

With these factors in mind, our key predictions for 2024/2025 include:

1. Owner-occupiers will scramble to buy strata units, setting new sales records.


2. A shortage of 1,000 – 3,000sqm warehouse spaces will push rents up by 20%.


3. Due to a complete shortage of workshops with gantry cranes, rent for these properties is expected to increase by approximately 30%.


4. Increased supply of warehouse stock over 5,000 sqm will stabilise rents, and some leasing incentives may re-emerge.


5. A continued shortage of new industrial land will continue to underpin industrial property prices.


6. Persistent investor demand, both locally and from the east coast, will likely maintain yields, with a possible increase towards the end of the year.

In short, it’s a great time to be involved in industrial real estate.

For more information or for a no obligation discussion about your property, please reach out to REIWA’s Commercial Agency of the on 08 9328 0999.