Tenant activity in Brisbane’s industrial market remained strong in Q1, but backfill created by strong supply completions has seen vacancy rise sharply, according to the latest research from Knight Frank.

Knight Frank’s Australian Industrial Review Q1 2024 found there was 196,000sq m of take up in Q1 2024, up 6% from the previous quarter and in line with the five-year average. More than half of the leasing activity came from pre-commitments (104,290sq m).

Knight Frank Head of Industrial Logistics in Queensland Mark Clifford said manufacturing users were the most active over Q1 accounting for 45% of take up, followed by retailers (25%) and transport users (15%).

“Of the Eastern Seaboard cities, Brisbane saw the biggest take up over Q1, while Melbourne and Sydney saw a 43% and 60% drop respectively, largely due to a lack of precommitment deals.

“Despite the relatively strong take up over Q1, strong supply completions in Brisbane has seen vacancy in the industrial market rise significantly, leading to greater options for tenants.”

Available industrial space increased 50% from 309,073sq m in Q4 2023 to 462,979sq m in Q1 2024.

This was in line with the trend across the industrial market on Australia’s eastern seaboard, with Melbourne’s vacancy increasing by 454,513sqm, ahead of Brisbane (+153,906sqm) and Sydney (+151,703sqm).

The research found vacancy in the country’s industrial market was back to early 2021 levels from the recent extreme lows, doubling across the Eastern Seaboard over Q1 this year to reach 1.49m sq m.

Mr Clifford said in terms of transactions in Brisbane’s industrial market, the breadth of purchasers and the size of industrial deals had begun to increase in Brisbane.

“While private investors are still active in the sub-$30 million price bracket, this quarter also saw the participation of syndicators and institutional capital in the market,” he said.

The Knight Frank research found prime yields in Brisbane’s industrial market remained stable through Q1 at 6.25%