As interest rates begin to ease, Western Australia’s industrial property sector is leading the recovery, underpinned by surging owner-occupier demand, tight land supply, and renewed investor confidence, according to Sterling Property Senior Partner and industrial expert Colm McHugh.
The Reserve Bank’s initial rate cut to 4.10% earlier this year marked a turning point for sentiment, but the real story is what’s unfolding now – a return of capital, a shift in business strategy, and intensifying demand in key growth corridors across Perth.
“We’re seeing the effects of rate easing play out across the market, and the momentum is only building,” Mr McHugh said.
“In the industrial sector, the combination of lower borrowing costs and limited leasing options is driving more businesses to pursue ownership—and they’re moving quickly before pricing and competition intensify further.”
Limited Supply Amplifies Owner-Occupier Shift
Across Perth’s outer industrial zones – such as Forrestdale, Wangara, and Neerabup—vacancy rates remain at near-record lows, and the shortage of serviced land continues to push prices up. Businesses are increasingly looking to secure long-term premises, rather than face rising rents and limited availability in the leasing market.
“This shift toward ownership isn’t speculative – it’s operational,” Mr McHugh said.
“Owner-occupiers are targeting sites that give them control, flexibility, and long-term cost certainty. With rates easing, the case for ownership has never been stronger.”
A Market in Transition
The industrial sector has consistently outperformed other commercial asset classes in WA, but the wider commercial market is also beginning to reawaken. Premium office and mixed-use assets—particularly in tightly held lifestyle precincts like Subiaco and Cottesloe—are beginning to attract renewed interest from investors seeking long-term value and income security.
“This is no longer a market waiting to turn—it’s already shifting,” Mr McHugh said.
What’s Ahead for 2025
With further interest rate cuts expected throughout the year, the outlook for Perth’s commercial property sector remains bullish—particularly for assets with strong fundamentals, solid lease profiles, or development upside. While larger-format warehouses may face some pricing pressure, mid-sized industrial assets close to infrastructure continue to see high demand and competitive bidding.
“Perth’s industrial market is moving quickly, and those waiting on the sidelines may find they’re priced out by the time they act,” Mr McHugh said.
“The next 6–12 months will define who gets ahead. There’s still opportunity—but the window is narrowing.”
