The industrial property market has seen a surge in owner occupier demand despite the rising debt costs. According to Colliers industrial experts, this trend is driven by the need for businesses to secure their own premises and ensure long-term stability.

Colliers Director of Industrial, WA Sam Hammond said “We have been inundated with owner occupier enquiries. In addition, with rents growing by more than 35% over the past two years, some occupiers are looking to avoid further rental increases by buying a facility.”

The current economic climate has resulted in an increase in debt costs, making it more difficult for businesses to secure financing for their operations. However, this has not deterred owner occupiers from investing in industrial facilities. In fact, the demand for such facilities has continued to grow, driven by the need for businesses to have a permanent base of operations.

Colliers Manager of Industrial, WA Hayden Dick said “We are currently running a leasing campaign for 146 Maddington Road, Maddington, a brand new 15,000 sqm Warehouse & Logistics facility due for practical completion in Q1-2024. We were surprised with the amount of groups reaching out and enquiring to purchase the asset, when it was listed for lease. We believe this is from strong and sustained rental growth experienced over the last 24 months, with expectations of future rental growth and appreciation in capital values.” Mr Dick explained.

Colliers industrial experts suggest this trend is also driven by the rising cost of renting industrial facilities. With rents increasing, businesses are finding it more cost-effective to purchase their own premises. This not only provides long-term stability but also allows businesses to build equity over time.

The strong demand for industrial facilities is expected to continue, with more businesses looking to secure their own premises. This trend is likely to have a positive impact on the industrial property market, providing opportunities for investors and developers alike.

“Locally owned businesses we are dealing with have strong order books which tend to underpin their investment appetite” Said Mr Dick.

Local businesses in Western Australia continue to expand in the current environment and are now seeing a good opportunity to buy as there are fewer active participants in the market.