Delays with establishing power, water and sewerage services on new land, and a slow release of industrially zoned land is sparking concern from real estate professionals about the future of industrial development in Adelaide and the state’s economy.

Only 10 per cent (146 hectares) of the 1,500 hectares of vacant industrial land that the South Australian government outlined in its 2021 Plan SA Land Supply report for Greater Adelaide, is available for immediate development.

As well as all industrial land being potentially exhausted within two years, industrial land values in Adelaide could increase significantly if the issue is not addressed, according to JLL research commissioned by the Property Council of Australia’s South Australian branch.

“We haven't just got a housing crisis, we've got an employment land supply crisis,” says Ben Parkinson, managing director and head of capital markets for JLL in South Australia. “We won't have enough employment land to support industrial demand.”

The value of industrial land in Adelaide’s outer north has risen 300 per cent over the past three years. If this growth rate is maintained to 2026, land pricing would rival that of markets like land-constrained South Sydney, according to the report Land locked: The economic potential of unlocking Adelaide’s industrial land supply.

“Industrial development will become unfeasible for developers and will be uneconomical for tenants,” the report said.

In the first three months of 2024, South Australia became the best performing economy among Australian states and territories for the first time ever, according to the Commonwealth Bank’s digital banking arm CommSec.

The state’s workforce is expected to swell further over the coming years with jobs created by AUKUS nuclear submarine building programme, as well as the state’s world-leading renewable energy transition.

“Industrial and employment lands accommodate the buildings where we work, manufacture, receive, store and distribute goods,” Bruce Djite, Executive Director of the South Australia branch of the Property Council of Australia wrote in the report. "Adelaide needs a consistent and adequate supply of development-ready land to support the economic growth trajectory of South Australia.”

This article has also been published in The Industrialist and InDaily.