Cushman: industrial vacancy to hit about 2.2% by 2029

Cushman & Wakefield forecasts that Australian industrial vacancy will fall across the major markets from 2027 and reach its low point in 2029 at around 2.2 per cent, and says Brisbane, where vacancy started falling in 2026, will keep tightening.

Why it matters

For a Brisbane developer or landlord, the message in Cushman’s Occupier Reset report is that the window for tenants to pick between buildings is closing while the window to start new ones is not yet open. The firm says rising construction and funding costs have pushed the rent a new project needs to break even 10 to 25 per cent above prevailing market rents in several key markets. Because of that, it now expects development feasibility to recover closer to 2029 rather than early 2027. Sites bought before 2021 may still stack up on lower land cost, the report notes, and some developers may accept thinner margins to start.

The numbers

Nationally, gross take-up reached 3,399,355 sqm in 2026 to date, but net absorption was only 767,386 sqm, which Cushman reads as leasing driven by relocations, consolidations and upgrades rather than expansion. National vacancy was 3.7 per cent in the third quarter, is forecast to peak near 3.9 per cent in the fourth quarter, and to ease to about 3.0 per cent by the end of 2027.

Brisbane is one of the stronger legs of that picture. The report puts the city’s vacancy at 3.1 per cent in the third quarter, below the national rate, with gross take-up of 869,501 sqm and average prime rent of $190 per sqm. Its chart shows Brisbane’s 304,000 sqm of net absorption this year second only to Sydney’s 315,000 sqm. Our calculation from those two figures is that roughly two thirds of Brisbane’s leasing was movement within the market, not new demand.

On supply, almost 3.1 million sqm could be delivered between the third quarter of 2026 and the end of 2027, but about 1.1 million sqm will only start once a tenant commits. Of the rest, 56 per cent is already pre-committed, leaving an uncommitted speculative pipeline of about 865,000 sqm. Cushman expects speculative completions in 2027 to be the lowest since 2021, with almost 60 per cent concentrated in three submarkets.

What’s next

Cushman’s own caveat is that the 2029 timing depends on how strong occupier demand proves and how much conditional development proceeds. It expects national net absorption to lift from 1.1 million sqm in 2026 to 1.9 million sqm in 2027 as large pre-committed expansion buildings complete, though still below the 10-year average. Infill and land-constrained locations should tighten first, while greenfield precincts such as Sydney’s Outer West and Melbourne’s South East stay looser for longer.

Luke Crawford, Cushman’s head of logistics and industrial research, warned that “headline vacancy may increasingly overstate the level of genuine choice” for tenants needing modern buildings in tightly held locations. For developers, the report’s advice is to design around clear height, yard layout and automation readiness, and to test speculative projects against pre-lease demand. Brisbane projects such as the Brisbane Airport industrial land release show where that pre-commitment-led model is already operating.