Perth Industrial
Market Overview
Q4 2015
For the 12 months to December 2015, take-up of industrial space
was 262,700 sqm, with over half of this take-up occurring in the
second quarter of 2015. Seven major occupier moves were recorded
in 4Q15, totalling 60,300 sqm of take-up. McPhee Distribution
Services, has pre-leased a 20,500 sqm facility at Lot 11 Talbot Road
in Hazelmere, to be developed by LOGOs Property Group. AAAC
Towing has leased a 12,635 sqm facility at 300-310 Treasure Road,
Welshpool, the site previously occupied by CEVA Logistics. In
smaller moves, trade goods supplier Tradelink leased 7,351 sqm at 6
Marriott Road, Jandakot, and Aurigen leased 3,094 sqm at 25
Jackson Street, Bassendean.
Supply
Supply additions in 4Q15 were lower than those reported in 3Q15,
with only one project of 3,500 sqm completing. Siemens new service
centre at Perth Airport reached completion over the December
quarter. There are currently eight projects under construction and
scheduled to finish in 2016, adding 181,800 sqm of supply.
Perth Industrial - Supply
200
180
160
140
120
100
80
60
40
20
0
'000s (sqm)
Demand
2012
2013
2014
2015
Total Completions
As at 4Q15
2016
2017
Source: JLL Research
Perth Industrial – Prime Net Rents
Asset Performance
12-Month Outlook
Given the slowdown in Perth’s economy, and the forecast continued
fall in engineering and commercial construction, demand
expectations for the Perth industrial market have been revised
downwards. Plans are approved for a further 54,400 sqm of industrial
space. Speculative construction is expected to be minimal, as
occupiers seek to maximise efficiencies in modern purpose-built
space. New industrial projects are likely to only begin construction
once a pre-commitment has been secured. The level of investment
interest for industrial assets remains high, more so for well-located
prime stock, of which there are limited facilities available for
investment. The lack of good stock on the market, and the limited
number of opportunities, may result in further yield tightening in the
next 12 months.
150
140
AUD / sqm p.a.
130
120
110
100
90
80
Dec-10
Dec-11
Dec-12
North
Dec-13
Dec-14
Dec-15
South
Source: JLL Research
Perth Industrial – Prime Yields
10%
9%
Prime Yields
Average prime rents decreased in the North and South precincts in
4Q15. Prime rents fell 2.7% in the South precinct to average
AUD 107 per sqm p.a. This was due to a decrease in office and
warehouse rents as a result of the softening leasing market, and
lower levels of enquiry. In the North precinct, prime rents decreased
by 1.3% to average AUD 119 per sqm p.a. Transactional activity
(≥ AUD 5.0 million) was down slightly on the previous quarter, with
4Q15 bringing total sales for the 12 months to December 2015 to
AUD 361.3 million. Three major industrial transactions totalling AUD
100.1 million were recorded in 4Q15. The prime yield range tightened
by 25 basis points (bps) at both the lower and upper end in 4Q15,
ranging between 6.75% and 7.25%. Yields for secondary investments
also tightened by 25 bps, ranging between 7.75% and 8.25%.
8%
7%
6%
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Source: JLL Research
COPYRIGHT © JONES LANG LASALLE 2016 All rights reserved. No part of this publication may be published without prior written permission from Jones Lang LaSalle. The information in this publication
should be regarded solely as a general guide. Whilst care has been taken in its preparation no representation is made or responsibility accepted for the accuracy of the whole or any part. We stress that
forecasting is a problematical exercise which at best should be regarded as an indicative assessment of possibilities rather than absolute certainties. The process of making forward projections involves
assumptions regarding numerous variables which are acutely sensitive to changing conditions, variations in any one of which may significantly affect the outcome, and we draw your attention to this factor