03 CHANGING OCCUPIER BEHAVIOUR
CUSHMAN & WAKEFIELD | 20
AUSTRALIA'S OCCUPIER MARKET OUTLOOK
FLIGHT TO QUALITY IS WIDENING THE GAP Occupier demand is increasingly concentrating in modern, highly functional facilities, while older secondary stock is giving back space.
Net absorption is concentrating in prime stock National net absorption by grade, 12 months to Q3 2026 (sqm millions)
The slowdown in occupier demand has not affected all industrial assets equally. While national net absorption has moderated, demand has become increasingly concentrated in prime-grade facilities that better support modern supply chain requirements. Over the 12 months to Q3 2026, prime facilities recorded approximately 2.1 million sqm of positive net absorption, while secondary assets contracted by around 700,000 sqm. In effect, all positive net occupier growth occurred within newer facilities, highlighting a widening performance gap between prime and secondary stock. Greater availability is accelerating this shift. Higher vacancy and stronger incentives are giving occupiers more opportunity to reassess their property requirements and upgrade into facilities better aligned with their long-term operational needs.
WHY ARE OCCUPIERS OPTING FOR BETTER QUALITY STOCK? 01 Greater occupier choice
2.5
+2.1m
Higher vacancy has allowed occupiers to be more selective about the buildings they occupy.
2.0
+1.5m
02
1.5
Narrower effective cost gap Higher incentives have reduced the effective cost differential between modern and older facilities. Better operational performance Modern facilities can offer greater storage capacity, productivity, automation capability and lower operating costs. Future-ready specifications Power, automation readiness, clear height and building configuration are increasingly influencing whether a facility can support future operational requirements.
1.0
03
0.5
0.0
04
-0.5
-0.7m
-1.0
Prime
Secondary
Total
Source: Cushman & Wakefield Research
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