New research from RWC Western Sydney shows the local industrial market has demonstrated “remarkable resilience in 2025, solidifying its position as Sydney's premier industrial location”.

RWC Western Sydney director Peter Vines said despite some economic uncertainty, the region continued to attract significant investment.

“The investment is underpinned by strategic infrastructure developments including the Western Sydney International Airport, which remains on schedule to open in late 2026,” he said.

Read the full report here or see below for some of the key findings:

Australia’s data centre capital

As artificial intelligence accelerates demand for digital infrastructure, Western Sydney was fast becoming ground zero for the next wave of industrial investment; data centres.

New data from RWC Western Sydney shows more than 650,000sqm of data centre projects were now in the pipeline, representing 15 per cent of all industrial investment volume in the region.

Hyperscale tenants and institutional capital are moving quickly to secure power-rich, future-ready sites.

“This is a structural shift in the market,” Mr Vines said. “These aren’t traditional warehouses. They’re built for automation, AI and cloud computing; Western Sydney is rapidly emerging as the hub for that growth.”

The surge in activity is being driven by demand for facilities with enhanced cooling, high energy loads and ESG credentials. With multiple developments under construction, the region is transforming from a logistics stronghold to a digital infrastructure powerhouse.

“Global tech infrastructure is landing in our own backyard,” Mr Vines said. “And it’s only just beginning.”

Green sheds, higher returns

Sustainable industrial assets are no longer a ‘nice to have’ - they’re now delivering superior performance in Western Sydney.

RWC Western Sydney’s latest report reveals that ESG-certified industrial buildings are commanding rental premiums of up to 15 per cent, with yield compression of 50–75 basis points compared to non-certified stock.

“Tenants are prioritising sustainability and future-proofing, and it’s translating directly into higher value for owners,” said Peter Vines.

Green-rated buildings are increasingly in demand from multi-national tenants seeking energy-efficient operations and ESG-aligned supply chains.

The trend is being reinforced by tightening investor criteria and evolving government standards. “Industrial is no longer just about location. It’s about power, automation and sustainability,” said Mr Vines.

Is the industrial market back in growth mode?

After two years of market adjustment, Western Sydney’s industrial sector is showing clear signs of recovery, just in time for the 2026 airport opening.

The new data from RWC Western Sydney shows capital growth has returned to positive territory, with total returns reaching 4.9 per cent in the Outer West and 4.4 per cent in the Central West.

The market has shifted decisively from decline to expansion. “We’ve hit the bottom and we’re already climbing,” Mr Vines said. “Yields have stabilised, buyer interest is returning, and there’s real confidence again in the sector.”

Improved funding conditions, strong rental growth, and the return of private and institutional investors have laid the groundwork for a broader upswing in 2025. “With the airport opening around the corner and infrastructure finally delivering, we’re poised for the next phase of growth,” Mr Vines said.

Could the Areotropolis solve Sydney’s industrial land crisis?

With industrial land in Sydney in critically short supply, Western Sydney’s Aerotropolis may hold the key to long-term growth.

The latest report from RWC Western Sydney reveals the Aerotropolis could deliver 4,448 hectares of serviced employment land by 2030, representing 60 per cent of Greater Sydney’s total undeveloped zoned supply.

“This is the largest undeveloped industrial opportunity Sydney has left,” said Peter Vines. “If serviced and delivered correctly, it could unlock a decade of growth.”

The findings coincide with the release of the NSW Government’s Aerotropolis Sector Plan, and come at a time when Sydney lags behind Melbourne and Brisbane in future-ready industrial land. “We have the land. What we need now is the infrastructure,” Mr Vines said.

Related Reading 

Is the Western Sydney Industrial market back in growth mode? - RWC | The Industrialist