Some encouraging signs have emerged for the Western Australian economy this year with some improvement in exports and increases in commodity prices. Unfortunately this growth is anticipated to be temporary in nature, furthermore hopes of improvements in employment, housing prices, retail trade and wage growth also put on hold.
While the state continues to lose people to the eastern states putting a hold on population growth, there has been some overarching change in sentiment due to some construction increases and infrastructure starts. This has been instrumental in building confidence in some market segments and as a result we have seen greater opportunistic investors venture to the west considering now being an optimal time to invest anticipating the current market is at 6 o’clock on the property clock.
Despite some improved confidence, this has yet to be translated into an improved level of take up in the industrial market. Ray White Commercial’s recent analysis of vacant industrial stock across the Perth market has resulted 1.099mill.sqm of vacant stock in the sub 5,000sqm size range which is actively being marketed. Historically the volume of stock in the North and East has been somewhat similar; during 2016 we saw a greater move to vacancies in the North. This year we can see a return to a more normalised split with the East of the city representing 453,778sqm or 41.29% followed by the North accounting for 375,230sqm (34.15%). The North represents 603 properties which also highlights the small size of each of the vacancies at just 622sqm which is consistent with the results seen six months ago. The South continues to maintain the smallest vacancy with 265,869sqm of vacant stock recorded approximately a quarter of all stock with a greater proportion in the larger size ranges, the more affordable nature of this location has also aided in keeping this vacancy level lowered.