Sydney’s industrial market primed for growth in H2 | Australian Markets
Sydney’s industrial property market is predicted to choose up in exercise over the second half of the 12 months regardless of seeing yield compression for the primary time since 2021.
According to Knight Frank’s Sydney Industrial State of the Market Q2 2025 report, each prime and secondary yields had tightened by 7.5 foundation factors for the primary time in 4 years.
This comes regardless of bustling transaction exercise in the second quarter amounting to $867 million, together with Centuria and BGO’s joint acquisition of three warehouses in Western Sydney totalling 45,000 sq. metres of industrial space for $201 million.
However, Q2 didn’t compete with Q1’s $936 million in transactions.
“Investor momentum is likely to pick up further over the second half of the year,” Knight Frank Associate Director for Research and Consulting, Marco Mascitelli, stated.
“We have passed the cyclical bottom of the market, with investors increasingly returning to the market as confidence returns, and further expected interest rate reductions will spur activity on.”
“The outlook for Sydney’s industrial investment market is very positive, with the RBA expected to cut rates through 2025, improving liquidity and investor appetite,” Knight Frank, Head of Industrial Investments, Angus Klem stated.
“Investors, therefore, anticipate yield compression and upside from asset revaluation. We anticipate a positive shift in transactional volume.”
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