Brisbane’s industrial market seeing positive signs
The industrial property market in Brisbane has experienced a slowdown in line with the rest of the commercial property market due to economic and global uncertainty, but parts of the market are performing well and there are positive signs for the future, according to Knight Frank.
12 June 2025
Knight Frank’s recently-released update to its Australian Horizon 2025 outlook report found momentum was returning across all sectors in the commercial property market with a nascent recovery underway after a divergent and disruptive downturn.
Retail and industrial asset values were first to start the recovery in late 2024, with all segments and cities returning to growth, according to report author and Knight Frank Chief Economist Ben Burston.
He said now, in the middle of 2025, demand for prime industrial and logistics property was resurgent, with competition ramping up for high quality assets in Sydney and Brisbane.
“Notwithstanding the risk of slower global growth, property markets will respond to the rate cutting cycle, and the shift in the outlook raises the prospect of yield compression in the second half of the year, starting in the most favoured core markets,” he said.
“Yields are already starting to edge down in Brisbane’s industrial market, and we expect to see yields sharpen in Sydney’s industrial market in coming months.”
Knight Frank’s latest Brisbane Industrial Precincts report found that while industrial turnover was subdued in Q1 this year, Brisbane industrial yields showed modest ongoing firming.
Super prime yields were stable at 5.73% over the quarter but prime yields were down 4 basis points to 6.10% and secondary yields were down 20 basis points to 6.62%.
“Super prime yields remained mostly untested until Q1, and the strong result for the Wacol Logistics Estate indicates that super-prime yields will also firm through 2025,” said Knight Frank Partner, Research and Consulting in Queensland, Jennelle Wilson.
“Greater certainty around interest rates at the start of 2025 and buyer engagement have led to a slight sharpening of prime yields.
“Secondary yields also continued to sharpen in Q1, now 64 basis points tighter than a year ago, supported by underlying land values and strong demand from private investors.”
Knight Frank Head of Industrial Logistics Queensland Mark Clifford said there was still a “massive undersupply” of industrial land in Brisbane, which was underpinning values.
