Market Update January – December 2022
RECORD BREAKING 2022 AS ALL KEY METRICS IMPROVE
2022 could only be described as a standout year for industrial property. Our market was underpinned by a thirst for the South East region, limited opportunity, and overwhelming demand. Total transaction volume increased by 8%.
- Sales and Leasing transactions balanced out at almost 50/50. This indicates a very healthy market.
- Average factory leasing prices jumped 58% over a 24 month period with m2 rates increasing by 37%. Average factory sale prices were equally buoyant increasing 66% and m2 sales rates improving by 36%.
- Yields compressed over the year to an average of 4.65%. We do expect the average yield to push out across 2023 given the flurry of interest rate rises over the tail end of 2022. Investment sales numbers were up along with the average price by 14.5%.
- Land sales continued their phenomenal march forward. Average m2 rates have more than doubled over the past 24 months. Our previous thoughts regarding the growing popularity of Pakenham and Officer came to fruition with respect to both price and uptake.
Where To From Here?
With the close out of 2022 we predict a stabilising of the market over 2023. Further interest rate rises will directly effect yields however this may be counterbalanced by a continued rise in leasing rates driven by tightening supply in key corridors.
Best Of Luck Over 2023
As always our market update is intended as a broad snapshot to give a general feel of conditions, varied asset classes and grades of property can perform vastly differently in the prevailing market so please reach out for some more specific analysis and advice.