Western Australia’s industrial sector regains momentum

08 June 2018

Western Australia’s industrial market is starting to regain momentum following a slow 2017, with the logistics sector driving new leasing progress in Perth, according to Savills Australia.

Savills has been at the forefront of this activity, leasing approximately 150,000sq m in the past five years, including 10 and 11-hectare sites at Jandakot Airport to Schlumberger and K-Mart respectively.

Savills Perth’s Director of Industrial & Business Services, James Condon, said that it was “a relief” to see the city’s industrial market make a comeback on the back of the city’s office market deal flow, which was also starting to rebuild following the mining sector crash.

“We’ve predominately been securing premises for businesses in the warehouse and logistics sector given the population growth,” he said.

“We expect mining services to start taking up large sites with engineering workshops as the market picks up towards the end of 2018.

“The majority of the mining services sector share prices have ramped up by 40 percent in the past six months.”

Savills Australia Associate Director for Research & Consultancy, Katy Dean, said the recent improvement in industrial-sector job ad numbers augured well for demand for business expansion space.

“As of March 2018, Western Australia has the highest growth rate across the nation for industrial job ads,” Ms Dean said.

“The state is seeing a resurgence in job growth, with job advertisement numbers on the rise since December 2016.

“Although coming off a low base, industrial logistics job advertisements are showing their highest year-on-year growth rate since early 2012 – the peak of the mining boom.”

Mr Condon said his team had adjusted its target market in response to the changing landscape throughout the past 12 months.

“We’re focusing on the decision-makers on the eastern seaboard, with regular monthly travel in the past five years,” he said.

“We travel regularly to Asia and target tenants who are looking at expanding into the Australian market, and we host monthly teleconference calls with all of the Savills Industrial Directors from around the APAC region.”

Mr Condon said he anticipated recent large-scale leases, including an 8,000sq m office/warehouse in Guildford to Chemist Warehouse, a 24,000sq m warehouse renewal in Henderson to Tronox, and a 10,000sq m warehouse in Fremantle to Qube Logistics, would inspire other industrial operators to renew or secure new tenancies.

Savills Perth’s Industrial & Business Services team is currently marketing seven warehouses above 5,000sq m for lease, with assets in Henderson, Kewdale, Welshpool, Bibra Lake, Naval Base, Hazelmere and Canning Vale ready to inspect. 

 
 

Key Contacts

James Condon

James Condon

Director
Industrial & Business Services

Savills Perth

+61 (0) 8 9488 4169

 

Katy Dean

Katy Dean

Associate Director
Research & Consultancy

Savills Sydney

+61 (0) 2 8215 6011