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The Western Australia capital is reporting some levels of improvement with the industrial market seeing record-low yields, new research has found.
According to Knight Frank’s latest Perth Industrial Market Overview, the sector is improving with record-low yields and an annual vacancy fall of 4.7 per cent year-on-year for 2018–19.
Suburbs reporting particularly good levels of improvement are Canning Vale, Bibra Lake and Wangara, the research found.
Oppositely, established eastern precincts like Kewdale and Welshpool are no longer enjoying the same success due to their older stock, according to Knight Frank.
Commenting further, the group’s sales and leasing director, Geoff Thomson, said other areas showing improvement in rental rates are those with recent infill subdivisions, where the delivery of new lots led to speculatively constructed buildings.
“The resurgent resource sector in WA is undoubtedly leading the recovery in the industrial property market, but at this stage, it is still very resource-focused,” Mr Thomson said.
“The demand for workshops with crane capacity and hardstand continues in the eastern and southern precincts.
“While there has been an increase in both sales and leasing activity over the last 12 months, it is very much focused on new stock, particularly in the Wangara/Gangara, Bassendean and Canning Vale areas.
“Speculative developments in these areas have predominantly leased in the short term and have outperformed the more established areas which are offering older-style facilities.”
In addition, Mr Thomson noted investment demand from both local and east coast-based investors had driven yields to record lows, but a lack of suitable investment opportunities meant there was relatively little sales activity.
ABOUT THE AUTHOR
Emma Ryan
Emma Ryan is the deputy head of editorial at Momentum Media.
Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.
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