Q2 2026 Australian Industrial Market Analysis - JLL Research

The national industrial vacancy rate decreased to 4.8% in Q2 2026, down from 5.0% last quarter. The latest JLL Research Industrial Vacancy and Supply update reveals that vacancy across most markets nationally trended downwards over the quarter with the exception of Perth. However, despite this quarterly increase, Perth remains the tightest market nationally at 2.2%.

• Sydney: 5.8% vacancy (highest nationally) across 23.5 million sqm
• Melbourne: 4.9% vacancy across 30.6 million sqm (Australia's largest market)
• Brisbane: 4.5% vacancy across 14.0 million sqm
• Perth: 2.2% vacancy (lowest nationally) across 7.7 million sqm
• Adelaide: 3.8% vacancy across 5.7 million sqm

In Sydney, the precinct-level vacancy rate movements were mixed, resulting in an almost unchanged blended vacancy rate over the quarter. Vacancy decreased in the Outer North West (-1.9 pps to 3.3%) and South Sydney (-0.5 pps to 8.6%). However, these decreases were counterbalanced by vacancy increases in the Outer South West (+1.3 pps to 6.8%) and the Inner West precinct (+0.3 pps to 4.1%). The vacancy rate in Sydney’s largest precinct, Outer Central West, was relatively stable over the quarter at 6.5%.

In Melbourne, vacancy trended downwards across most precincts. The largest quarterly decrease was recorded in the City Fringe precinct, which decreased 3.2 pps to 3.4% in Q2 2026. However, total stock in the precinct only represents 3.5% of Melbourne’s total industrial stock, so any movement in occupancy levels has a disproportionate impact on the vacancy rate. Vacancy also decreased in the North (-0.7 pps to 5.4%) and the South East (-0.3 pps to 4.4%) precincts over the quarter. The vacancy rate in the West precinct (5.4% in Q2 2026) has been broadly stable for the last five quarters, hovering between 5.2% - 5-4% since Q2 2025.

The largest decrease in quarterly vacancy nationally was recorded in Brisbane this quarter. The vacancy rate decreased in both the Southern (-1.4 pps to 4.2%) and the Trade Coast (-1.0 pps to 4.1%) precincts in Q2 2026. However, vacancy increased in the Northern precinct, increasing 2.1 pps to 6.4%.

The vacancy rate in the non-eastern seaboard markets of Perth and Adelaide remain lower than the national vacancy rate. Although vacancy has increased for consecutive quarters in Perth, it remains the tightest vacancy rate in Australia at 2.2%. The vacancy rate across most of Adelaide’s precincts decreased in Q2 2026, resulting in a 0.7 pps decrease to 3.8%.

JLL's analysis reveals that vacancy within the medium-to-large building size cohort (10,000-30,000 sqm) remains the highest of all the size cohorts nationally, reaching 6.1% in Q2 2026. The has been driven largely by a high volume of speculative development recently within the size cohort, particularly along the eastern seaboard. Leasing demand for larger space remains positive, underpinned by occupier pre-lease demand for modern, efficient warehousing of scale. The vacancy rate in the 30,001 - 45,000 sqm size cohort is the tightest nationally at 2.3%.

Occupier demand continues to surprise on the upside with elevated leasing deal flows in 2026 continuing to incrementally absorb speculative warehouse space introduced to market over the past two years. However, the ongoing US-led global conflict in Iran and the resultant inflationary pressures on fuel domestically could negatively impact logistics business profitability over the short-term as current petrol contract pricing ends and new contracts are negotiated.

Occupiers will continue to look to improve business efficiencies through accommodation and will opportunistically look to upgrade facilities. As a result, the higher vacancy risk is expected in secondary grade space.

JLL Research tracks over 81.5 million sqm of industrial stock nationally. As at Q2 2026, a total of 2.1 million sqm of industrial warehouse is currently under construction nationally to be delivered largely over the next 18 months.