The latest REIWA statistics have revealed some fascinating developments across Western Australia's commercial property markets. While the industrial sector faces tightening conditions, the retail and inner suburban office markets are experiencing significant growth.
Industrial Market: Tight Supply and Rising Prices
The industrial property sector is grappling with a combination of declining sales activity due to a lack sales stock and limited land availability. Sales transactions have fallen by 9%, largely due to a severe shortage of developable land, resulting in a noticeable scarcity of warehouses of circa 1,000 – 3,000 m2.
Despite these constraints, demand has remained steady, primarily driven by owner-occupiers. Interestingly, many are prepared to purchase properties and wait until existing leases expire, demonstrating confidence in the long-term value of these assets and the lack of supply.
This sustained demand amid limited supply has pushed the median sale price up by 14%. On the leasing front, while industrial rents are holding firm, the pace of rental increases has started to ease as tenants become more selective, seeking properties that better meet their specific operational needs.
Retail Sector: A Standout Performer
In contrast to the industrial market, the retail sector has been a clear standout, posting a 34% increase in transaction volumes. This surge in activity has also led to a significant 24% rise in the median sale price.
A key driver behind this resurgence is the growing vibrancy of suburban retail centres. Confidence in this sector is reflected in the launch of six new retail projects, either already underway or set to commence shortly. Investors and developers alike are capitalising on the sustained consumer interest and strong fundamentals in these suburban locations.
Inner Suburban Office Markets: A Strong Rebound
The inner suburban office precincts of Leederville, West Leederville, Northbridge, and Subiaco continue to rebound strongly, reaffirming their appeal to both investors and occupiers.
Transaction volumes in these areas have risen by 12%, accompanied by a 10% increase in median sale prices. Rents have followed a similar trajectory, with office rental rates in these highly sought-after locations also increasing by around 10%.
This rebound reflects renewed confidence in well-connected, amenity-rich office precincts that offer businesses the benefits of proximity to the CBD without the associated premium costs.
Where to from here
The latest data underscores a fascinating divergence across Western Australia's commercial property sectors. While industrial markets face the challenges of tight supply and rising prices, retail and inner suburban office markets are flourishing, offering attractive opportunities for investors and occupiers alike.
“With WA’s economic fundamentals remaining strong and the prospect of future interest rate cuts, we’re looking at a positive and energised outlook for commercial sales activity.”
— Wayne Chorley, Executive Director, Realmark Commercial
For strategic insights on navigating these shifting market dynamics, contact the Realmark team in commercial property today.
Source REIWA Member Commercial Property Market Reports - Greater Perth - March 2025