Brisbane was the only city on Australia’s East Coast to see a reduction in industrial vacancy  in the last quarter of 2024, according to the latest research from Knight Frank. 

The firm’s Australian Industrial Review Q4 2024 found vacancy in Brisbane’s industrial market fell by  4.7% in Q4 last year to 648,379sq m or a vacancy rate of 4.3%, led by a greater take up in existing  stock. 

In comparison, Melbourne’s vacancy rate rose by 95,624sq m% to 3.3%, while Sydney’s vacancy  increased by 21,995sq m to 2%. 

Despite a slight fall in Q4, vacancy in Brisbane’s industrial market remains elevated – sitting at 46%  above the five-year average - due to the combination of backfill space and new speculative  development starts. 

Across the East Coast cities of Sydney, Melbourne and Brisbane, vacancy rose by 4% over Q4 and  now sits 33% above the 10-year average due to record development completions over 2.6 million  square metres last year, but despite this it is now considered to be back in line with long-term levels  after the extreme lows of 2022-2024. 

As Knight Frank’s Australian Horizon 2025 report, released at the end of 2024, predicted, there has  been a deepening divergence in vacancy rates and rental performance in Australia’s industrial market  depending on location and supply levels in different precincts. 

In Brisbane, the South East remains the tightest major market with only 33,000sq m available, most of  which is sublease space. The Greater North market has the lowest vacancy rate of 1.2% for assets of  3,000sq m plus, with the stock remaining skewed towards smaller occupiers.

With some of the tightest vacancy, the South East saw rents rise by 11.3% in 2024, while the sought  after Trade Coast had the highest rental growth of 14%. Meanwhile, in the South, where the greatest  vacancy is, rents rose by 2.9% last year. 

Over 2024 Brisbane prime rents rose by 7.2% on average, the second highest after Adelaide at  12.1%. Melbourne (6.7%) was next, followed by Perth (6.1%) and Sydney (3.9%). 

Knight Frank Head of Industrial Logistics Queensland Mark Clifford said tenant activity had slowed a little at the end of last year but activity over 2024 was still 7% higher than 2023 and 9%  above the five-year average. 

“Transport, postal and warehouse tenants were the most active over 2024, accounting for more than  one third of take up. 

“In general, car retailers and delivery partners have been particularly active in the market both for  improved and hardstand facilities. 

“The end of 2024 saw a slow down in decision making processes due to general market uncertainty  around whether the market would see an interest rate cut. Now that this has happened we believe  occupiers may act with more confidence and commit to moving forward on their property strategies. 

“We have seen a reasonably strong start in 2025 in terms of enquiry levels and occupier interest in  prime grade space in particular. We are expecting to see this translate into leasing deals over the  coming months.” 

Knight Frank Partner, Research and Consulting Queensland Jennelle Wilson said new supply in  Brisbane’s industrial market was expected to be slightly lower in 2025 (567,257sq m) than in 2024 (just over 660,832sq m). 

“2025 supply will again be dominated by speculative projects which account for 58% of currently  expected supply, while a further 34% is pre-committed and 8% owner-occupied.  

“The South precinct is expected to deliver 42% of total supply for Brisbane during 2025. 

“With supply to moderate in 2025, particularly as speculative construction slows, the market is  expected to return to balance relatively quickly with tenants remaining attracted to quality new product.  

“Effective rents for existing or secondary product may come under pressure over the year due to  increasing incentives in the market.”