Prime Rents Surge Across the Country

 
Prime industrial rents surged by double digits in most capital city markets in 2021 as tenants were pushed to compete for the small amount of available space on the market.
 
According to JLL, the highest prime effective rental increases occurred in Perth (up 14.6 per cent), Melbourne (14 per cent) and Adelaide (13 per cent) over 2021.
 
In the secondary market, effective rents rose 16 per cent in Brisbane and Melbourne and 10 per cent in Sydney.
 
Around the country, a record 4.4 million square metres of warehouse space was taken up in 2021. This is a 52 per cent rise on the 2.9 million square metres taken up in 2020.
 
The data from JLL shows that prime industrial rents increased by more than 10 per cent in most capital city markets, fuelled by the acceleration of online retailing and supply chain disruptions.
 
JLL believe the completion of 1.3 million square metres of new logistics facilities in the next six months will ease pressure on companies needing warehouse space and create a more normalised rental market. Two-thirds of this new supply is already accounted for in leasing pre-commitments.
 
Fourth-quarter 2021 figures from JLL show 877,200 square metres of space was leased over the last three months of the year. The majority of this activity was in Melbourne (39 per cent) and Sydney (33 per cent).
 
Last year, JLL says 1.47 million square metres of new space was developed nationally, which was in line with the 10-year annual average. The full-year gross take-up total (4.4 million square metres) was 82 per cent higher than the long-term annual average.
 
JLL still expects above-average growth in the major markets in 2022 with many owner-occupiers requiring immediate access to more space.