Newcastle’s industrial market hot spots

Industrial property has been seeing unprecedented levels of activity for the past few years and the sector does not look to be slowing down any time soon.

With the key factors for growth all falling into alignment, industrial property sales and leasing look to be on a trajectory of continued growth.

Land supply of industrial zoned land is limited, a key factor driving the continued pricing increases in the market.

Demand for industrial property

The demand for industrial space in Newcastle has continued to remain buoyant, largely driven by the following sectors in the region:

• Logistics and Warehousing: Increasing e-commerce activities have spurred demand for large distribution centres over the past few years.
• Manufacturing: Growth in advanced manufacturing has led to higher demand for industrial facilities.
• Renewable Energy: The rise of renewable energy projects in the region is driving demand for related industrial space.

With a multitude of industrial areas across the region, we’ve reviewed the some of the key suburbs below to provide you with a comprehensive analysis of the Newcastle and Hunter Region industrial market.

1. Beresfield

Attractiveness:

• Strategic location near the M1 Motorway and Hunter Expressway. It also boasts proximity to major transport routes and the Port of Newcastle.

Trends:

• Supply: Limited new land releases; existing properties in high demand.
• Demand: Strong, driven by logistics and distribution companies.
• Vacancy Rates: Very low, around 2.0%.
• Rental Rates: High, averaging $150-$190 per square meter per annum.
• Land Values: Increasing, with prime lots fetching premium prices.

2. Mayfield West

Attractiveness:

• Proximity to the Port of Newcastle and Newcastle CBD
• Well-established industrial area with modern facilities.

Trends:

• Supply: Scarce with new developments quickly absorbed.
• Demand: Strong, particularly from warehousing.  Logistics, automotive parts and service sectors.
• Vacancy Rates: Low, around 2.5%.  Largely from strata units less than 350 sqm
• Rental Rates: High, averaging $150-$200 per square meter per annum.
• Land Values: Significant increase due to high demand and limited availability.

3. Cardiff

Attractiveness:

• Central location with good transport links.
• Suitable for light manufacturing, trade retail, service industries.

Trends:

• Supply: Stable, but new developments are limited.
• Demand: Steady, driven by small to medium enterprises (SMEs).
• Vacancy Rates: Moderate, around 3.0%.
• Rental Rates: Moderate, averaging $130-$160 per square meter per annum.
• Land Values: Stable, with moderate increases.

4. Tomago

Attractiveness:

• Proximity to the Port of Newcastle and major highways.
• Ideal for heavy industrial activities.

Trends:

• Supply: Limited, with high competition for available land.
• Demand: Very strong from heavy manufacturing, renewable energy and logistics.
• Vacancy Rates: Very low, around 1.5%.
• Rental Rates: High, averaging $150-$170 per square meter per annum.
• Land Values: High, with significant appreciation over the last year.

5. Rutherford

Attractiveness:

• Growing industrial hub with good transport access.
• Attracts manufacturing and logistics businesses.

Trends:

• Supply: Increasing, with several new developments.
• Demand: Growing, particularly in manufacturing and warehousing.
• Vacancy Rates: Moderate, around 3.5%.
• Rental Rates: Moderate, averaging $130-$160 per square meter per annum.
• Land Values: Increasing, particularly for well-located parcels.

6. Thornton

Attractiveness:

• Proximity to major highways and good connectivity.
• Suitable for a variety of industrial uses.

Trends:

• Supply: Availability of land is scarce, with limited new developments.
• Demand: Steady, driven by diverse industrial needs.
• Vacancy Rates: Low, around 2.5%.
• Rental Rates: Moderate to high, averaging $140-$170 per square meter per annum.
• Land Values: Increasing steadily.

7. Bennetts Green

Attractiveness:

• Accessible location with modern industrial facilities.
• Popular among retail and service-oriented industries.

Trends:

• Supply: Limited, with high demand for available spaces.
• Demand: High, driven by retail and service industries.
• Vacancy Rates: Moderate, around 3.2%.
• Rental Rates: High, averaging $140-$160 per square meter per annum.
• Land Values: Increasing, particularly for well-located sites.

8. Cameron Park

Attractiveness:

• Strategic location near major highways.
• Ideal for logistics and warehousing.

Trends:

• Supply: Limited, with new developments in demand.
• Demand: High, particularly from logistics and distribution companies.
• Vacancy Rates: Moderate, around 1.5%.
• Rental Rates: High, averaging $140-$170 per square meter per annum.
• Land Values: Rising due to strong demand.

9. Hexham

Attractiveness:

• Close to the Port of Newcastle and major highways.
• Suitable for heavy and light industrial activities.

Trends:

• Supply: Limited, with high competition.
• Demand: Strong from heavy industry and logistics.
• Vacancy Rates: Very low, around 2.0%.
• Rental Rates: High, averaging $130-$170 per square meter per annum.
• Land Values: Moderate with steady appreciation.

10. Tighes Hill

Attractiveness:

• Central location close to the city and the Port of Newcastle.
• Suitable for light manufacturing and mixed-use activities.

Trends:

• Supply: Limited, with new developments rare.
• Demand: High, particularly from light manufacturing and services.
• Vacancy Rates: Low, around 2.5%.
• Rental Rates: High, averaging $150-$200 per square meter per annum.
• Land Values: Increasing, with high competition for prime locations.

The Future Outlook for Industrial Property locally

The outlook for Newcastle’s industrial property market remains positive, driven by ongoing economic growth, infrastructure development, and strong demand from key sectors. Rental rates are expected to continue rising, and vacancy rates are likely to remain low.  Due to this market environment, it is expected that investment activity will remain strong in this asset class for the region, continuing to provide stability for the local industrial market.