The total industrial vacancy on the Eastern Seaboard continues to rise and currently sits at 2.17 million square metres, which is 29 per cent higher than the level reached 12 months ago, according to the latest Industrial Vacancy Analysis research report by
Analysis reveals that much of this rise in industrial vacancy over the first half of 2014 stemmed from an increase in the Melbourne market which rose by 29 per cent to reach 807,269 square metres.
Knight Frank’s National Director of Research & Consulting, Mr Matt Whitby, said that after a modest fall in the first quarter, the Brisbane industrial market recorded an increase in industrial vacancy, rising by 8 per cent over the past quarter to 594,191 square metres, while the Sydney industrial market also rose over the quarter to 770,014 square metres, halting recent steady improvement over the previous year.
“As at July 2014, the Melbourne industrial market continues to account for the highest proportion of East Coast industrial vacancies with a 37 per cent share of available space followed by Sydney which accounts for 36 per cent of vacant space and Brisbane accounting for a share of 27 per cent,” continued Mr Whitby.
“Although the level of prime grade industrial space across the Australian East Coast market remains marginally lower than secondary accommodation, the gap continues to narrow.
As at July 2014, the proportion of total vacancies made up of prime stock is now at its highest level since the series began with prime stock accounting for 49 per cent of East Coast industrial vacancies, up from 34 per cent two years ago.
The proportion of available prime space is relatively evenly split in both the Sydney, 53 per cent and Melbourne 48 per cent, industrial markets, whereas prime industrial space within Brisbane accounts for 44 per cent of total available stock, albeit this proportion has increased from 34 per cent a year ago.
Knight Frank’s Managing Director of Industrial, Mr Greg Russell, said that over the quarter, the largest rise of prime available industrial vacancy stemmed from an increase in available speculative stock in Sydney and Melbourne, which increased by 61,796 square metres and 43,154 square metres respectively.
“Prime industrial vacancies also rose in Brisbane which increased by 55,853 square metres driven predominately by robust pre-lease activity, with occupiers relocating to newly built facilities and a resultant increase in prime backfill a major factor in this increase,” continued Mr Russell.
“Although the total industrial vacancy on the Eastern Seaboard has risen to record highs, the outlook is more promising with tenant requirements picking up.
