Industrial Market
FY2027 | Quarter 1
The national industrial vacancy increased to 3.8% in Q3 2026, reversing two quarters of compression as a significant volume of speculative supply was completed across the country. Despite the increase, vacancy remains low by historical standards. Occupier demand regained momentum during the quarter, with 1.3 million sqm of take-up recorded nationally, representing the strongest quarterly result since 2023. While supply delivery accelerated in Q3, year-to-date completions remain approximately 17% below the same period last year and 2026 is expected to record the first below-average year of supply delivery in seven years.
Rental growth remains positive across most markets, although momentum has become increasingly mixed by location. Brisbane continues to outperform, with vacancy tightening further to 3.1% and occupier demand remaining well above long-term averages. Prime net face rents have recorded double-digit annual growth over the past three quarters, while secondary rents continue to benefit from affordability-driven demand. Incentive growth has moderated nationally as leasing conditions rebalance, with average incentives increasing at a significantly slower rate than experienced throughout 2024 and early 2025. As a result, occupiers continue to retain greater choice in several eastern seaboard markets.
Industrial & Logistics investment activity remained resilient throughout 2026, supported by deep domestic and offshore capital pools and improving confidence in pricing. National transaction volumes exceeding $10 million reached $7.1 billion year-to-date, already surpassing the long-term full-year average and positioning 2026 to potentially exceed 2025 volumes. Yield movement has begun to emerge as transaction evidence has improved, with national prime yields softening by 4 basis points over the past 12 months to a weighted average of 5.76%, while secondary yields have remained largely unchanged. Despite ongoing economic uncertainty, investor demand continues to be supported by the sector’s low vacancy, resilient occupier demand and favourable long-term fundamentals (Colliers Australian Industrial & Logistics (I&L) Market Q3 2026).
Regional Queensland
As of 2026, industrial market conditions across the Mackay region remain strong, underpinned by ongoing demand from the metallurgical coal mining sector. There is also a continued shortage of industrial accommodation and serviced land. Paget is the region’s primary industrial hub, with limited availability of existing stock supporting continued development activity and investor interest. Because of supply constraints, several new industrial projects have are underway, including warehouse, trade, retail and multi-tenanted industrial developments. However, market conditions remain characterised by demand exceeding available supply (Herron Todd White, May 2026).
Notable sales in the Mackay Industrial Market include:
- 17 Milton Street, Mackay sold in May 2026 for $5.1 million (6.24% passing yield)
- 33-41 Diesel Drive, Paget sold in March 2026 for $15.1 million (8.46% passing yield and 6.99% market yield)
Townsville’s industrial market remains constrained by a shortage of available stock with also limited new developments underway. Industrial sales volumes have declined significantly, with transaction numbers falling 49% year-on-year from 2025 from 82 sales to 42 sales. Meanwhile, total sales value decreased 39% to $72.3 million.
Supply shortages remain the dominant market driver, with established industrial precincts nearing capacity and limited vacant land availability. Additionally, elevated construction costs are restricting new development. Leasing conditions have moderated from recent peaks; however, quality industrial accommodation remains tightly held and well sought after. The medium-term outlook remains positive, supported by continued population growth and major regional infrastructure projects. There is also a persistent shortage of industrial land and accommodation (Colliers Townsville Property Market Overview, May 2026).
Notable sales in the Townsville Industrial Market include:
- 22 Langton Street, Garbutt sold in May 2026 for $10 million (7.40% yield)
- 2-6 Vennard Street, Garbutt sold in December 2025 for $5.5 million (7.27% yield)
