Category:   Commercial Property InvestmentProperty Insights

Author:   Paul Scarfone

Date:   3 June 2026

The Industrial Supply Squeeze: Why South-East Perth Is Outperforming in 2026

In our August 2025 EOFY update – and in our late-2024 sector comparison before that – we backed industrial property as the standout performer in Perth’s commercial property market. REIWA’s December 2025 Commercial Property Update confirmed it: industrial was Perth’s top-performing commercial property type for the full year to December 2025, with the median sale price per square metre up 15.5% to $2,935.

For investors in Perth’s South-East corridor – Welshpool, Kewdale, Belmont, Victoria Park, Cannington, Ascot and Burswood – that headline number isn’t a surprise. What’s more interesting is the reason the number looks the way it does, reshaping how we think about industrial investment for the next 12 to 18 months.

The numbers behind the call

REIWA’s December quarter data confirmed that all three commercial sectors recorded median price growth in 2025, but industrial led by a clear margin. The 15.5% lift to $2,935 per sqm was the strongest annual performance in the sector for several years. Sales volume dipped slightly through the year – a useful indicator that the price growth is being driven by scarcity, not a buying frenzy.

Non-agency commentary corroborates the picture. Smart Business Plans’ Perth Commercial Property Update from October 2025 put industrial median price growth at 15.1% over the same period, also citing a 4.6% dip in sales volume as evidence of “a classic supply-demand squeeze”. By early 2026, the same analysis was reporting that Perth’s industrial vacancy had tightened to around 2.0% – among the tightest in the country.

In other words: prices are up because there’s nothing on the shelf.

Why industrial is winning – and why that won’t ease soon

REIWA President Suzanne Brown made the cause explicit. Members are reporting major challenges getting new industrial property to market, with four distinct bottlenecks:

• Delays across planning and property development approvals
• Hold-ups securing titles and clearances on subdivisions
• Significant issues getting power connected to new industrial sites
• Increasing issues getting water connected

That last pair is worth pausing on. Industrial tenants are not flexible about power and water. A warehouse without three-phase power, or a manufacturer or food-grade facility without a reliable water connection, isn’t a warehouse – it’s a slab of concrete. These are not problems that resolve by next quarter, or even next year. They are long-cycle utility-infrastructure issues, and the projects waiting on them are sitting in the pipeline rather than coming to market.

The implication for investors is straightforward. Established industrial precincts that are already serviced, zoned and connected – the precincts we work in every day – are sitting on the right side of a structural supply imbalance. New estates further out can’t catch up quickly enough to relieve pressure on rents or prices.

What this means for the South-East corridor

The South-East corridor sits at the centre of Perth’s industrial freight network. Infrastructure WA’s State Infrastructure Strategy and ongoing Tonkin Highway corridor works reinforce its role as the primary east-west freight connection between Fremantle and the Kewdale intermodal facility, with Welshpool, Forrestfield and Belmont feeding directly into that backbone. For tenants who need to move goods, the South-East is not a substitute for newer estates – it’s the destination.

Here’s what we’ve been seeing on the ground:

Welshpool

Welshpool remains the most actively traded industrial suburb in the South-East. Demand is heavily weighted toward small-to-medium warehouses with hardstand, good clearance and three-phase power – the kind of stock that tends to lease before it formally hits the market. Owner-occupiers in logistics, trades and light manufacturing are competing for the same buildings, which is supporting both capital values and rents.

Kewdale

Kewdale’s intermodal connection makes it a natural fit for transport, logistics and distribution operators. We’re seeing tenants prepared to commit to longer lease terms (5- and 10-year deals are common) to secure access to the right freight position. For investors, that translates to strong WALEs and a reliable income profile in a market where well-located stock is increasingly scarce.

Belmont

Belmont continues to be one of the most flexible industrial-office hybrid markets in Perth. Its proximity to Perth Airport, Tonkin Highway and the CBD makes it attractive for businesses that need a mixed footprint – warehouse plus office. Smaller strata-titled units have been moving particularly well with owner-occupier purchasers.

Victoria Park

More office and retail than pure industrial, Victoria Park acts as the white-collar end of the corridor and supports tenant demand across the broader area. Service-based businesses anchoring there often drive ancillary industrial demand in nearby Welshpool and Kewdale.

Investor takeaways

For investors and owner-occupiers considering industrial exposure in the South-East corridor in 2026, four things are worth thinking about.

1. Serviced sites carry a premium for a reason. Power, water, zoning and access are now genuine differentiators. Treat them as core diligence, not nice-to-have.
2. Off-market matters more than ever. A material share of the best industrial transactions in our suburbs never list publicly. If you’re not in the loop with active local agents and property managers, you’re seeing a smaller market than you think.
3. WALE and tenant covenant are the value drivers. With rents rising and vacancy near record lows, the value lift on a well-let asset over the next 24 months should come from securing long, escalated leases to good operators.
4. Lender appetite is supportive. Industry commentary from non-bank commercial brokers continues to flag Perth as having the strongest cross-sector lender appetite in the country – driven by resources sector recovery and population growth. Financing is a tailwind, not a headwind, for well-structured purchases.

Expert tip: In a supply-squeezed market, the best assets aren’t necessarily the cheapest. A well-located, fully serviced warehouse in Welshpool or Kewdale on a long lease is genuinely scarce – and scarcity is what protects capital values when broader sentiment softens.

Outlook for the rest of 2026

Smart Business Plans summed up the macro backdrop neatly: if 2025 was the year the commercial market found its footing, 2026 is the year the recovery broadens. We agree, with a South-East corridor caveat. The supply constraints REIWA flagged in December are infrastructure-level – they don’t unwind quickly.

That points to continued upward pressure on rents and capital values in established industrial precincts through 2026. Infrastructure WA’s ongoing freight corridor investment reinforces the long-term case for Welshpool, Kewdale and Belmont specifically. And with industrial vacancy still around 2%, the room for a sudden softening is limited.

For investors, the next 12 months are less about hunting for bargains (there aren’t many) and more about positioning – securing the right asset with the right tenant before the rest of the market catches up to what we’re already seeing on the ground.

Why local expertise matters more than ever

When a market is genuinely supply-constrained, three things become disproportionately valuable: knowing what’s coming off-market before it lists, knowing which properties have the right hardstand, power and access, and having the relationships with tenants and owner-occupiers that turn an enquiry into a deal.
Ross Scarfone Real Estate has been working exclusively in Perth’s South-East commercial and industrial market for more than 35 years. We’re a family-owned business, our team lives and works in the corridor, and we manage a substantial book of commercial property across Welshpool, Kewdale, Belmont and surrounding suburbs. That gives our clients access to opportunities that national agencies – most of whom run their commercial desks out of the CBD – simply don’t see.
If you’re considering buying, leasing or selling industrial property in the South-East, or you’d like a frank conversation about where the value sits in this market, get in touch with our team.

Reference sources

The data and insights in this article are drawn from the following public sources, current as of May 2026:

1. REIWA – Industrial was Perth’s top performing commercial market in the year to December 2025. Available at: reiwa.com.au
2. Smart Business Plans – Perth Commercial Property Update, October 2025. Available at: smartbusinessplans.com.au
3. Smart Business Plans – Industrial Property Investment Australia: Finance Strategies in 2026. Available at: smartbusinessplans.com.au
4. Infrastructure WA – State Infrastructure Strategy (Tonkin Highway / freight corridor). Available at: infrastructure.wa.gov.au