WA MARKET OVERVIEW
WESTERN AUSTRALIA
WA Market Overview with Colm McHugh
Reflecting on 2022, what were some of the prevailing trends that you noticed and how did they play out in the market? Perth’s industrial sector experienced significant growth in 2022. With the strength of demand outstripping supply, vacancy rates dropped sharply throughout the year to below 0.5%. Reflecting the rapid tightening in the market rents rose rapidly during 2022 and increased by over 30%. This also led to a drop in leasing incentives. The industrial land sales market has continued to be a strong performer throughout the year. We have been involved in three sub-divisions which has all sold off the plan prior to titles. Land values have increased due to the level of take up, and there is still pent-up demand for new stages to be released. Investors interest in the industrial sector remained strong throughout 2022, particularly for offerings that presented the potential for rental growth due to the increase in market rents. Marketwise, what are you forecasting in 2023 and how will increased lending costs impact various markets? With the influence of the resource sector on WA’s economy we see the industrial market remaining strong in 2023. Major projects driving this growth include the second stage of the Pluto and Gorgon LNG projects. A strong state budget is set to see public investment pick up with major infrastructure projects including the staged Metronet. This will help keep the demand for industrial space strong. The increased lending costs will see investment yields soften this year; however, this should be offset by the recent rental growth and low vacancy rates.
COLM MCHUGH Licensee / Director of Industrial LJ Hooker Commercial Perth
102 – May / June 2023
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