Source: JLL Research Australia

The manufacturing industry has contributed 20% to national demand over 2023, following in second behind TP&W at 51%. KPMG Australia has noted that the manufacturing industry is navigating supply chain and shipping delays in conjunction with growing transport and raw material costs.

Ongoing geopolitical events during 2023 have changed manufacturer views towards the onshoring of operations in Australian states. With current tensions being reported in other parts of the globe, Australia is somewhat removed from the risks associated with these events. Hence, the manufacturing industry could become more competitive domestically and within the Asia-Pacific region. JLL Research has recorded machinery and equipment manufacture as the highest contributing sub-industry within manufacturing, adding 161,700 sqm towards warehouse demand over 2023. Transport equipment manufacturing took 61,800 sqm of space and food product manufacturing demand accounted for 52,900 sqm.

Among the Australian industrial markets, NSW has overtaken Victoria as the most prevalent contributor to manufacturing tenant demand. This comes as a change, given Melbourne industrial precincts have typically attracted more manufacturing tenants than any other Australian region for 5 consecutive years.

As 2024 commences, an influx of new supply currently under construction is forecast to reach completion across Australia. Sydney’s Outer Central West has 278,000 sqm under construction, Melbourne’s West precinct has 432,000 sqm and in Brisbane, the Southern precinct is anticipating 309,000 sqm of additional industrial warehousing. With substantial growth in supply on the horizon, which industries will require the most of this new space once it arrives?

Stay up to date with JLL Research as we monitor industrial real estate performance throughout 2024.

*Australian markets and national statistics are the combined value of Sydney, Melbourne, Perth, Adelaide and Brisbane.