How is Canberra’s Industrial Property Market Evolving?

Sales demand remains strong across Canberra’s key industrial precincts, but a slowdown in leasing activity has prompted developers to reassess their strategies. Here’s how Canberra’s industrial market is shifting.

Owner-Occupiers Dominate Sale Demand

Canberra’s industrial sales market remains active, particularly for smaller vacant warehouses under $1,000,000 in Fyshwick. Buyers are typically business operators looking to own and occupy and while investors are still present, they are seeking already tenanted properties. Yields overall are steady at around 6.5%. Interest in larger warehousing above 500sqm has slowed.

Tenant Retention Remains High

Leasing activity across Canberra’s industrial hubs has been slower than expected, with existing tenants choosing to renew rather than relocate. With limited entry from new businesses, this has introduced some uncertainty around the leasability of new developments. Having said this, there has been a recent spike in larger tenants (over 1,000sqm) coming to market, with forward new briefs coming forward in the last month.

Developer Interest Shifts, Land Prices Hold

Rising construction costs are slowing large-scale industrial projects, with developers now favouring smaller, strata-titled complexes. In comparison, industrial land prices remain at record highs of $750–$850 per sqm, though pressure has eased slightly due to new supply across the border in Queanbeyan.

Looking ahead, a potential rate cut later this year could help stimulate renewed market activity and boost confidence across the industrial sector. A rate cut would not only benefit investors looking for better yield opportunities, but businesses looking to free up capital and secure the right site, whether through leasing or owning.

Civium’s next edition of InFocus will look at our experiences across the commercial property sector in the past 12 months. Reach out to register for a copy sent direct to your inbox when live.