‘Land Locked’: The latest report from the Property Council of Australia

News & Insights
News & Insights
‘Land Locked’: The latest report from the Property Council of Australia

While the housing crisis dominates headlines, a new report reveals a brewing problem in Adelaide: a critical shortage of industrial land.

The Property Council of Australia (PCA) released a report titled ‘Land Locked–highlighting the value and contribution of industrial land to South Australia’s economy’.
The report uncovers that without immediate action, development-ready industrial land in Greater Adelaide could be exhausted within two years. We spoke to Broadway’s Director, Ryan Stewart to learn more about the impending land-crisis:

Q: What is the current state of industrial land supply in Adelaide?
A: According to the PCA report, without immediate action, current industrial zoned land in Adelaide could disappear based on current absorption rates within two years. We have been seeing the impact of low supply on the industrial land market for a number of years now and this has led to a 300% increase in land values between 2020 and 2023.

Q: Based on current trends in manufacturing and logistics, what are the projected long-term demands for industrial space in Adelaide, in your opinion?
A: We expect demand from logistics and manufacturing users to increase due to the rapidly changing nature of warehousing and logistics driven by ecommerce, but we expect locally that sovereign capability around manufacturing in Australia will continue to gain momentum.

Demand for modern industrial buildings that can incorporate modern technology for logistics users as well green building initiatives that allows organisations hitting ESG targets in the short to medium term will continue to drive demand for land in this sector Adelaide and around Australia.

Q: The report highlights the importance of protecting existing industrial precincts. How can we ensure these areas remain attractive for businesses while also accommodating future growth and potential changes in industry needs?
A: Making employment lands readily accessible with good access to amenity will be important to ensure existing employment lands remain attractive places to do business and attract staff. We understand that industrial precincts closer to the CBD could be under threat due to the current housing crisis, however we see these infill areas as being critical from an employment perspective as well as critical from a supply chain and logistics perspective now and into the future.

Q: While the report focuses on Adelaide, are there similar land availability issues in other key industrial hubs across South Australia? If so, what are the proposed solutions for those regions?
A: These issues are not isolated to SA. This is an issue around the country.

Unfortunately it takes a lot of time to be able to provide critical infrastructure such as power and water to existing employment lands, let alone future areas of employment land supply.

Governments and statutory planning and infrastructure authorities unfortunately are struggling under the weight of demand for new supply of Employment and Residential related development which requires critical infrastructure to be connected. Getting relevant approvals and required infrastructure upgrades takes a lot of time, and is very expensive.

It is critically important for governments and statutory authorities to try and work together to become more efficient with unlocking land supply across Australia. Unfortunately, we fear that this will take a number of years, and in the interim while there is a land supply issue, as well as increased costs in providing infrastructure as well as construction, we only see occupation costs (rent) for industrial occupiers continuing to rise and remain an issue in the short to medium term.