Industrial sector leads Perth’s commercial market in year to September

The industrial sector was the best performer for price growth in the Perth commercial market in the year ending September 2024, according to REIWA’s September Commercial Property Update.

The average sale price per square meter for the Perth industrial market reached $2,500 at the end of September, showing a 12.1 percent increase compared to the previous year and a 4.6 percent rise from the 12 months ending June 2024.

REIWA CEO Cath Hart said the industrial market continued to be driven by strong demand and limited supply.

“Ongoing competition for industrial property is maintaining the upward pressure on prices,” she said.

“Our members report strong demand from owner-occupiers and multiple offers on smaller lots.

“Urban infill subdivisions are particularly attractive, but supply challenges persist, with most new land releases located on Perth’s outskirts.”

The North West area had the highest average sale price per square meter at $2,819, followed closely by the Inner area at $2,815 per square meter.

A total of 1,048 industrial sales in the Greater Perth region were recorded over the 12 months to September 2024, which is a decrease of 7.7 percent compared to the previous year.

The South East area had the most sales with 281, while the North West and South East areas each recorded 262 sales.

Across Perth, 34.6 percent of industrial sales were priced between $1 million and $5 million.

Office:

The office market also experienced significant growth.

The average sale price per square meter at the end of September was $4,408, which is 7.6 percent higher than the previous year and 6.7 percent higher than the year ending June 2024.

The Inner area had the highest average sale price per square meter at $4,751, accounting for 44.6 percent of all office sales with 186 transactions.

Ms. Hart noted that strong demand for medical office spaces was a key factor in this growth, reflecting Perth’s ageing population.

“Doctors are seeking ownership opportunities for their own rooms, particularly in the Western Suburbs,” she said.

“Larger clinics are also in demand across the broader Perth market.”

A total of 417 office sales in the Greater Perth region were recorded over the 12 months to September 2024, marking an 11.8 percent increase compared to the previous year.

Across Perth, 36.8 percent of office sales were priced between $250,000 and $500,000.

Retail:

The retail market saw the strongest growth in sales, with the number of transactions increasing by 40.6 percent year-on-year.

Ms. Hart mentioned that the retail sector had experienced significant growth in sales over the past year.

“Retail properties are performing strongly, with investors favouring sites leased to national brands on long-term agreements,” she said.

The annual median sale price per square meter at the end of September was $4,725, which is 10.0 percent higher than 12 months ago and 7.5 percent higher than the year ending June 2024.

The Inner area had the highest annual median sale price per square meter at $7,741 and led in sales volume with 47 transactions, closely followed by the South West area, which had 45 sales.

Across Perth, 31.4 percent of retail sales were priced between $250,000 and $500,000.

REIWA’s September Commercial Market update follows the State Government’s recent review of the Commercial Tenancy (Retail Shops) Agreements Act 1985.

Ms. Hart stated that the positive figures highlighted the need for a retail market that balances the interests of commercial landlords and tenants.

“REIWA is focused on advocating for a balanced and viable leasing environment for everyone in the sector,” she said.

“For example, we will engage with the State Government to ensure that smaller landlords, particularly those outside major shopping centers, are not disproportionately burdened by new compliance obligations.

“We also want to ensure that the legislation continues to support tenants, especially in navigating lease agreements, while maintaining flexibility for landlords in challenging economic conditions.

“I encourage landlords, agents, and tenants to engage with REIWA and provide feedback ahead of the consultation period next year.”

You can read the full commercial update here.