Sydney’s 2019 Market Insights and Predictions

February 13, 2019

The latest prediction for the Sydney real estate market from Link Property Services

 

2019 has started with a flurry of activity, dominated by leasing activity across Sydney’s key industrial regions. The pre-Christmas Sydney hailstorm caused a spike in demand for centrally located functional industrial facilities with immediate availability –leases struck, however, were for 1-2 year terms. Leasing activity continued strongly throughout January, with Link Property Services recording its busiest ever January period.

 

The South Sydney market continues to be heavily constrained by supply, with incentives coming under continued pressure and face rentals continuing to climb on the back of the imbalance between supply and demand. Sub 5000m² facilities in Western Sydney have followed a similar trajectory with incentives continuing to fall (0-5%) and face rentals climbing higher. Asking rents for 5,000m² in Eastern Creek, for example, are typically between $140-145 m² net.

With the NSW and federal government elections looming, we expect the leasing market to stall as businesses assess the political landscape as we enter the EOFY period. This will likely see a spike in demand as we enter the new financial year.

Broadly speaking, we believe 2019 will continue to deliver strong activity within the industrial sector, as retail suffers and online retail continues to gather momentum. Transport, 3pl, logistics is going to continue to underpin industrial demand, and whilst industrial land values may slow in their rate of growth, the strong outlook for industrial rental growth will more than compensate for any slow down in land values. For this reason, Industrial remains the asset class to be in 2019.

 

Matthew Herrett 

Link Property Services