Industrial Market
FY2026 | Quarter 4
Industrial vacancy tightened across the East Coast to approximately 3.9% Q1 2026, marking the first meaningful improvement in almost two years. The improvement reflects stronger absorption and a sharp slowdown in speculative completions. In addition, increasing pre-commitment activity is occurring, with new supply forecast to fall a further 20% in 2026. While vacancy remains elevated in some markets following the recent development cycle, it continues to sit within market equilibrium. Furthermore, it remains well below historical peaks (KF Australian Industrial Review, Q1 2026 and Savills Spotlight Shed Briefing Q1 2026).
Rental growth remains positive across most markets, although momentum has become increasingly mixed by location. Brisbane continues to outperform, recording 10.1% annual prime face rental growth and 9.2% growth in prime effective rents. Secondary rents continue to benefit from affordability-driven demand, while incentives remain elevated across Sydney and Melbourne. As a result, occupiers retain greater choice (KF Australian Industrial Review, Q1 2026).
Industrial & Logistics investment activity remained resilient through 2025 and into early 2026, supported by improving liquidity and deep domestic and offshore capital pools. In addition, there is growing confidence in pricing. National direct investment volumes reached $8.3 billion in 2025, up 20% year-on-year. Meanwhile, broader industrial transaction volumes exceeded $12 billion nationally. Prime yields have largely stabilised, averaging approximately 5.2% in Sydney and 5.7%–5.8% in Melbourne and Brisbane. In Adelaide and Perth the average is 6.4%, with pricing continuing to be supported by limited stock availability, low vacancy and strong long-term sector fundamentals. Despite this, broader economic uncertainty persists (Colliers Australian Industrial & Logistics (I&L) Market Q1 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 been encouraged, 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:
- 33-41 Diesel Drive, Paget sold in March 2026 for $15.1 million (8.46% passing yield and 6.99% market yield)
- 217 Farrellys Road, Paget sold in December 2025 for $19.5 million (6.69% passing yield)
- 79 Dozer Drive, Paget sold in December 2025 for $10.75 million (7.14% passing yield)
Townsville’s industrial market remained resilient throughout 2025, although activity was constrained by a critical shortage of available stock. There were also limited new development opportunities. Industrial sales volumes declined significantly, with transaction numbers falling 49% year-on-year 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:
- 602-604 Ingham Road, Mount Louisa sold in November 2025 for $8.95 million (8.53% yield)
