THE INSIGHT
Perth Industrial Vacancy and Market Overview
RWC WA | January 2025
Introduction
The Perth industrial property sector continues to demonstrate resilience amid evolving market conditions, marked by a clear distinction between small and large format performance.
Total vacancy across the metropolitan area has risen, primarily in larger format assets over 5,000sqm, while smaller industrial assets maintain historically tight occupancy levels. This two-speed market reflects both the maturation of Perth’s industrial sector and the changing space requirements of occupiers adapting to current economic conditions.
Investment activity, while moderating from previous years’ peaks, has remained steady through strong private investor participation and renewed offshore interest. The market recorded approximately $750 million in transactions during 2024, with yields broadly ranging between 5.8% and 7.5% depending on asset quality and covenant strength. Perth’s relative value proposition compared to east coast markets, combined with its strategic advantages in connectivity and land availability, has attracted increased attention from both domestic and international investors, particularly in specialized assets such as data centres and self-storage facilities.
As the market moves through this transitional period, the fundamental supply-demand imbalance, particularly in prime locations and smaller assets, continues to provide a strong foundation for the sector’s performance despite broader economic uncertainty.
Perth industrial vacancy
The Perth industrial market is experiencing a divergence between small and large format vacancies.
Total available space across the metropolitan area currently sits at 586,540sqm, with a notable concentration in assets over 5,000sqm. The sub-5,000sqm segment remains relatively tight with 229,101sqm available - a marginal increase from 223,555sqm in June 2024, though up from 155,607sqm recorded in June 2023.
The East precinct currently accounts for the highest proportion of total vacancy at 318,707sqm, representing over half of Perth’s available space. This is largely driven by substantial vacancies in the over 5,000sqm category, particularly across Canning Vale, Welshpool, Kenwick and Maddington, where 242,000sqm is currently available.
The North precinct has emerged as the tightest market with just 85,974sqm available, showing significant improvement from historically higher vacancy levels in areas like Malaga and Wangara. While the South precinct maintains its traditionally low vacancy rate in the sub-5,000sqm category, total available space has increased to 181,859sqm when including larger format properties.
The sub-5,000sqm segment continues to perform strongly across all precincts, indicating sustained demand for smaller industrial assets despite the broader market adjustments.
By region (sqm)
Source: RWC WA 84,974 318,707 181,859
Vacancies industrial property by size range
The composition of available industrial stock in Perth continues to evolve, with sub-500sqm listings now representing 42.9% of total listings, down from historically higher levels exceeding 50%.
The North precinct remains the dominant market for smaller assets, accounting for 69 of the 112 sub-500sqm listings currently available.
A notable shift has occurred in the 501-1,000sqm category, which has expanded to 15.3% of listings, up from 10.8% in June 2024. This increase may reflect occupier responses to elevated rental rates, with some businesses optimizing their space requirements by relocating to smaller, more affordable facilities.
The market has seen growing availability in larger size ranges, with properties over 1,501sqm now comprising one-third of all listings. These larger offerings are predominantly concentrated in the East precinct, while the North precinct maintains limited large-format vacancy. The South precinct features a balanced distribution, with availability in mid-sized properties throughout Bibra Lake and Forrestdale. This evolving size distribution suggests a market adjusting to changing occupier demands while maintaining relatively tight conditions in the small-bay segment that has traditionally characterised Perth’s industrial landscape.
Vacant industrial property by size range
- 2,500sqm
- 1,500sqm
- 1,000sqm
Source: RWC WA 5,001 + sqm 2,501 - 5,000sqm
Perth industrial net face rents
By region ($/sqm)
Source: RWC WA
The Perth industrial market is transitioning from the exceptional growth phase of recent years to a more sustainable pattern. While tenant demand has moderated and enquiry levels have softened, historically low vacancy rates continue to underpin the market’s performance. The North precinct leads current rental rates at $132/sqm, following a modest 1.5% annual increase, with the East precinct tracking at $126/sqm. These figures reflect a market that has matured significantly, with the South precinct recording impressive five-year annual growth of 11.1%, followed by consistent returns of 9.7% per annum in both the East and North.
Construction costs remain elevated, limiting new supply and effectively setting higher benchmark rents for new developments. This dynamic, combined with economic uncertainties, has driven more tenants toward property ownership as a hedge against rising occupancy costs. While rental growth is expected to moderate due to slight increases in vacancy, the limited development pipeline and sustained high construction costs should help maintain rental levels above historical averages. This structural supply constraint, particularly for institutional-grade assets, continues to be a defining feature of Perth’s industrial landscape despite the broader softening in demand.
Industrial sales volume
The Perth industrial investment market remained active through 2024, recording approximately $750 million in transactions despite challenging economic conditions.
While this represents a moderation from previous years’ volumes, the market has maintained momentum through strong private investor participation, accounting for approximately three quarters of all purchases. Yields have adjusted to the current environment, now broadly ranging between 5.8% and 7.5% depending on asset quality, location, and covenant strength.
Private investors, particularly from Australia’s eastern states, continue to view Perth as an attractive value proposition, helping maintain competitive yield levels. This domestic interest has been complemented by a resurgence in offshore capital, notably from Japan, Malaysia, and the United States, who are particularly focused on self-storage and data centre opportunities
given Perth’s strategic advantages in connectivity, land availability, and climate conditions. The favourable Australian dollar exchange rate has further enhanced the market’s appeal to international buyers.
Owner-occupiers remain highly active, often outbidding investors for quality assets as they seek to control occupancy costs. This competitive dynamic, combined with Perth’s structural supply constraints and high construction costs, continues to underpin values despite the broader economic uncertainty. Looking ahead, the fundamental supply-demand imbalance and limited development opportunities are expected to sustain investment activity, particularly as interest rate clarity emerges.
Source: Real Capital Analytics, PIMS RWC WA
Conclusion
Looking ahead, the future performance of the Perth industrial market will be shaped by several key factors that suggest a period of strategic opportunity despite broader economic challenges.
Western Australia’s continued population growth and strategic position as a gateway to Asian markets should maintain stable occupier demand throughout 2025, particularly for small to mediumsized assets where vacancy remains historically tight.
The widening divergence between small and large format performance is likely to persist into 2025. While the sub-5,000sqm market should remain relatively stable given limited new supply and sustained demand from small-to-medium enterprises, the larger format segment may experience extended letting periods, particularly in the East precinct. This could create opportunities for tenant-driven optimization of space requirements and strategic consolidation plays.
Investment activity is expected to gain momentum as interest rate stability emerges, with yield spreads likely to attract both domestic and international capital. Perth’s relative affordability compared to east coast markets, combined with the favourable Australian dollar, should continue drawing interest from Asian and American investors, particularly in specialised assets like data centres and self-storage facilities. The growing presence of east coast private investors seeking value opportunities is expected to maintain competitive tension in the sub-$20 million market.
Construction costs will remain a significant market feature, creating a floor for both capital values and rents while limiting speculative development. This structural constraint, combined with Perth’s scarce serviced industrial land supply, should help maintain asset values despite moderating rental growth expectations. Owner-occupiers are likely to remain active as they seek to control occupancy costs, potentially driving continued competition for quality assets.
RWC WA
Ground floor, 12-14 The Esplanade, Perth WA 6000 raywhitecommercialwa.com
Chris Matthews
Joint Managing Director 0413 359 315 chris.matthews@raywhite.com
Liam Pittaway
Sales & Leasing Executive 0439 555 439 liam.pittaway@raywhite.com
Tom Jones
Sales & Leasing Executive 0478 771 117 tom.jones@raywhite.com
Lachlan Burrows
Sales & Leasing Executive 0499 552 296 lachlan.burrows@raywhite.com
Michael Danagher
Sales & Leasing Executive 0403 049 989
michael.danagher@raywhite.com
Victor Aloi
Sales & Leasing Executive 0404 808 012
victor.aloi@raywhite.com