Australia Industrial Logistics Vacancy Report H2 2025

Australia’s average Industrial & Logistics vacancy rate continued its gradual upward trajectory through 2H25, reaching 3.2% nationally. While vacancy has risen, it remains below the 3.5% level we previously anticipated for this period, indicating a softer-than-expected increase in available space. 

 

Vacancy is still expected to peak in 2H26; however, even at its highest point, it will likely remain below the market’s ‘equilibrium’ threshold of 4%.

 

Melbourne continues to record the highest vacancy in the country at 4.7%, while Sydney, Perth and Adelaide have experienced more moderate increases. Brisbane, by contrast, held relatively stable at 3.1%. This steady result reflects an uplift in vacancy across the Australia Trade Coast and M1 Corridor, being offset by a significant 1.9% decline in Brisbane’s South, driven by absorption of existing space and very limited new stock being delivered in that precinct over the past six months. 

 

Melbourne’s vacancy profile shows clear precinct differences. The North saw the strongest rise, lifting to 7.0%, driven mainly by prime and secondary assets, with only a small number of super prime buildings vacant. The West remained relatively steady, though vacancy is similarly concentrated in prime and secondary stock. The South East and East also recorded increases, largely due to a few larger format spaces coming to market. With Melbourne’s upcoming supply pipeline moderating, vacancy is expected to stabilise and begin trending down post-2026.

 

Nationally, the risk of sublease space has now largely subsided and is no longer viewed as a material threat to future supply. Looking ahead to 2026, a new trend is emerging: a decline in super prime availability alongside a lift in vacancy within prime and secondary assets. This reflects the superior height clearance and efficiency of super prime facilities, which enable higher pallet density and better utilisation compared with older stock. These efficiencies are increasingly critical for logistics operators - Australia’s largest industrial occupier segment - supporting sustained demand for modern super prime space.

 

In the long-run, Australia’s supply of serviced, zoned industrial land is expected to remain structurally constrained, limiting new development pipelines. This scarcity, combined with the ongoing expansion of e-commerce and food & beverage occupiers, as well as sustained population growth, will remain key drivers of long-term sectoral growth.