Australia’s industrial market has seen an uptick in investment volumes, highlighting an  improved economic outlook and investor confidence, according to the latest research from Knight Frank.  

The firm’s Australian Industrial Review Q4 2024 found $10.6 billion in industrial assets sold over 2024,  which was 23% higher than 2023 

Investment activity picked up over the second half of 2024 with sales volumes totalling $5.9 billion. 

Knight Frank National Head of Industrial Logistics James Templeton said investment activity was  expected to accelerate further in 2025. 

“Multiple transactions have already been executed in 2025, and we anticipate momentum will continue  as economic conditions improve,” he said. 

“The activity we have seen in the market following on from last year is evidence that investors have  long-term confidence in the industrial sector, and indeed retain a strong preference for industrial  assets. 

“We have seen one rate cut so far this year and with further cuts forecast this year we expect this will  assist in fuelling the market.”

Knight Frank Partner, Research and Consulting in Queensland Jennelle Wilson said investor  demand and easing monetary policy had brought stability to yields in Australia’s industrial market, with  some slight exceptions. 

Prime yields held firm in Q4 across Sydney (5.46%), Melbourne (5.58%) and Perth (6.5%), while  Brisbane and Adelaide saw a slight tightening of 2 basis points and 3 basis points respectively to  average 6.14% and 6.28%. 

“Secondary yields experienced minor movements except in Brisbane with yields tightening 22 basis  points over Q4 to average 6.82 per cent,” she said. 

“Looking ahead, the market is likely to respond positively to the lower interest rate environment with  average prime yields expected to start contracting in coming quarters.” 

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