Perth Commercial & Industrial Property Market Review - March 2025
“With the recent easing of the cash rate by the RBA, the likelihood of improving affordability will likely strengthen. ”
Western Australia has again topped CommSec’s State of States for the December quarter, leading the nation in five of the eight economic indicators. WA ranked first in retail spending, relative unemployment, housing finance and dwelling starts, underpinned by the highest relative population growth.
The Industrial market continues to perform strongly, with rental and capital growth within this sector outpacing the office and retail sectors.
There continues to be a shortage of industrial accommodation (both for lease and sale) within the core and secondary markets, particularly for properties with lot sizes in excess of 4,000sqm. Transport, Logistics and Manufacturing facilities are still keenly sought.
The continued shortage of supply of quality industrial accommodation is having an upward influence on rents, particularly within the “core” industrial precincts. The slight softening of yields over the past 6 months is largely attributable to rental growth, with capital values holding steady.
With the recent easing of the cash rate by the RBA, the likelihood of improving affordability will likely strengthen demand further, particularly from the owner occupier sector. Investor demand, which includes a significant amount of enquiry from interstate, remains strong, however the level of transactional activity is being stymied by the low number of investment grade assets being put to market.
Looking forward, we anticipate some easing in construction costs and finance costs will improve the feasibility of new projects. Given the pent-up demand that exists, upward pressure on capital values and rents is expected to continue in the short to medium term.
David Lamb, MLV Real Estate