Australian Industrial Market Report | H1 2026
More supply, more leverage, for occupiers who move early.
Industrial rents have settled at a new, higher baseline, and the supply pipeline is expanding quickly. Rather than cutting rents, landlords are expected to use incentives to bridge the gap. For occupiers, that means greater choice and stronger negotiating leverage.
Key takeaways
Pre-COVID rents are gone: Rental growth has stabilised, but at levels well above historical benchmarks.
Supply is arriving: Sydney is on track to deliver around 750,000 sqm in 2026, with 975,000 sqm in the 2027 pipeline. Melbourne is on track for 520,000 sqm in 2026.
Incentives are the lever: Average incentives have reached 24.2% in Melbourne’s West and 20.5% in Sydney’s Outer West.
Not every market is loosening: Perth (2.2% vacancy) and Adelaide (2.7%) remain tight. Occupiers there need to plan early on both space and timing.
What this means for occupiers
Lease renewals, relocations and expansions are all worth testing against the market now, before supply and demand rebalance.
Inside the report: Macroeconomic outlook, national themes, and submarket-level data for Sydney, Melbourne, Brisbane, Perth and Adelaide. Covers vacancy, net rents, incentives, outgoings, absorption and the Franklin Shanks outlook for each market.
