The Australian industrial market continues to break records, with 2024 marking the highest level of industrial supply completions in history. A total of 3.09 million sqm of new industrial space was delivered nationwide - 81.3% above the long-term 10-year annual average reinforcing the sector’s resilience and ongoing appeal to investors.

Australia – Annual Industrial Supply by Market, 2014-2024

Source: JLL Q4 2024

Eastern Seaboard Dominates Supply Growth

More than 90% of this new supply was concentrated in Melbourne, Sydney, and Brisbane, the country’s key logistics and distribution hubs.

• Melbourne led with 1.09 million sqm (35.1%)
• Sydney followed closely at 1.07 million sqm (34.7%)
• Brisbane accounted for 661,800 sqm (21.4%)

These figures highlight the sustained demand for high-quality industrial assets in strategic locations.

Warehouses Are Getting Bigger - And Investors Are Taking Note

The scale of industrial developments in Australia is evolving rapidly. Over the past decade, the average warehouse size has increased by 27.8%, from 13,500 sqm in 2014 to 17,200 sqm in 2024. This shift has been driven by a growing number of large-scale warehouse projects, with 64 completions exceeding 35,000 sqm in the past five years - surpassing the 54 projects recorded in the entire preceding decade.

“Australia’s record industrial supply in 2024 was driven by occupiers seeking greater efficiency in their warehouse accommodation, and developers responding to strong demand by delivering modern, high-spec warehouse spaces,” says Rick Warner, JLL Research Director.

Speculative Development Stabilising as Pre-Lease Commitments Surge

After a period of accelerated speculative development, the market is now stabilising. Pre-lease commitment rates have climbed to 72.9% in 2024, up from an average of 66.5% over the past two years - an encouraging sign of renewed confidence in the sector.

“Tenants have been examining accommodation requirements nationally and gaining productivity through consolidation exercises, advantageous freight network proximity, and increasingly, through attractive incentives offered during leasing negotiations which have been the catalyst for relocation decisions,” adds Warner.

Sector-Specific Demand Fuels Southeast Melbourne’s Strength

While industrial supply has surged nationwide, demand remainsparticularly strong in Melbourne’s East/ South East which has emerged as the tightest sub-market on the Eastern Seaboard. Close to 25% of demand is coming from the manufacturingsector including construction, food & beverage and pharmaceuticals.

“With 116,000 sqm already under Heads of Agreement, Melbourne’s East/ South East is on track to surpass its five-year average demand of 500,000 sqm,” says Stephen Adgemis, JLL Senior Director, Logistics and Industrial Leasing.

“The confirmed 128,000 sqm of speculative supply for 2025 is likely to be significantly outweighed by demand, given current market conditions.” 

“With industrial rents projected to rise over the next two years, we are seeing tenants lock in leases now to secure higher rates over the next two years, further fueling market activity,” Adgemis continues.

Looking Ahead: Investment Opportunities in 2025

With 2.42 million sqm of industrial space currently under construction and 1.86 million sqm expected to be delivered over the next 12 months, the pipeline remains strong. Combined with rising retail trade figures, increasing online spending, and recent interest rate adjustments, industrial occupier demand is set to remain steady in 2025.

For investors, Australia’s industrial sector continues to offer compelling opportunities particularly in prime logistics locations and high-growth industries