Peak body warns of SA govt’s industrial land ‘policy disaster in waiting’
A powerful state industry body is making a dire prediction over Adelaide’s industrial land running out – as one property owner reveals his land tax rates have doubled in two years.
Without “immediate intervention” by the state government, Adelaide will run out of serviced industrial land within 18 to 24 months, the South Australian branch of the Property Council is warning.
Group members feared that unless the state government “urgently” invested in immediately expanding stormwater networks, it would be Labor’s “next public policy disaster in waiting”.
Developers were prepared to invest in employment or industrial land, the Property Council claimed, with industrial vacancy the lowest in the nation at 1.6 per cent – below the national average of 2.7 per cent.
But without investment in infrastructure, industrial land would become scarce and land values and rents would continue to soar, “which poses a significant economic threat to the state”.
The influential lobby group called on the government to prepare an ‘Industrial Roadmap’ to support the release of serviced industrial land in its recently released ‘Prosperity Roadmap’; a wish list of preferred policy positions.
This would involve the state government unlocking 800 hectares of land in Northern Adelaide via the funding of a $50 million outfall drain at Playford and Salisbury, and the creation of a ‘Northern Economic Growth Taskforce’ chaired by SA Premier Peter Malinauskas to drive the growth of strategic employment land.
Newly appointed Property Council of Australia SA deputy executive director Sally Smith – who was integral in the development of the Greater Adelaide Regional Plan (GARP) and the creation of the electronic planning system in her previous role as deputy chief executive of the Department for Housing and Urban Development – told InDaily the government had identified what it needed over the medium to long term.
“But I don’t think there’s enough in the GARP to talk about how we actually service that land and unlock it in the short term,” she said.
“I think we’ve got a quantity of zoned employment land, but it’s not ready to be used. It needs to be serviced.
“I don’t think the state knows, and I don’t think the sector knows exactly how much development-ready land we have – land that is zoned but also serviced.”
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She said that for developers to want to lodge a development application, they needed certainty about water, wastewater, roads, power and other infrastructure connections.
“That’s the immediate crisis we’ve got before us, unlocking already-zoned land,” she said.
This was particularly important for Greater Edinburgh Parks, a large parcel of well-preserved and well-located land in Adelaide’s north set aside for strategic employment land, particularly for the defence industry, which was set to grow with the progression of major programs like the AUKUS defence pact.
“It’s a massive piece of land. It’s got houses all around it, great links for people to live and work, but it unfortunately just doesn’t have any spare capacity in infrastructure,” Smith said.
“We’re very lucky in that we’ve got it, we just need to really get on the front foot with it.
“At the same time, we probably haven’t done enough infrastructure planning to get ready for that, because we need to be bringing it online sooner rather than later.”
South Australia was experiencing an upswing in its labour market, SEEK senior economist Blair Chapman told InDaily, with the state recently recording the highest rate of employment growth over the past year of 3.7 per cent, above the national rate of 1.5 per cent.
He said this was a turnaround from 2024, when there was a dip in the South Australian labour market, with growth occurring in sectors like health and construction.
As such, transport infrastructure was a priority for the state government, he said.
“You need to be able to get people to the employment,” he said.
“There’s always the issue with industrial facilities about where they’re is going to be.”
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Property Council of Australia SA executive director Bruce Djite told InDaily that simply rezoning areas would “really frustrate the market”.
“It doesn’t do a lot other than inflate land prices, which have gone bananas,” he said.
“When you look at the input cost of land, the input cost of construction, the input cost of infrastructure and you add that all up, the rent you need a tenant to pay to make the project feasible is now maxed out. The tenants aren’t going to pay the rent that a developer requires.
“Hence, you get this shortage in supply.”
A state government spokesperson said providing sufficient land supply for employment use was a significant focus of the Greater Adelaide Regional Plan.
“Through the GARP, The Malinauskas Government will continue to unlock vacant and underutilised employment land in township and greenfield growth areas, serviced by infrastructure, to support SA’s economic growth and productivity,” he said.
“The government has also recently passed Coordinator General legislation to focus on large-scale developments including industrial land opportunities.”
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Industrial land taxes soar
Meanwhile, Djite said property owners were being slugged with increasingly expensive land taxes.
Documents seen by InDaily show one land owner of an industrial site saw his land tax bill go from $72,999 in FY23, increasing to $144,046 in FY24, and then $139,461 in FY25 – effectively doubling over two years.
“I couldn’t believe it when I saw it,” Djite said.
“It’s a real risk to the state and its economic prosperity. But it also comes from when you don’t have enough land. It’s not sustainable.”
TheProperty Council called for “better” tax settings in its ‘Prosperity Roadmap’, with issues “at worst… a complete obstacle to attracting local, interstate and international capital”.
The state’s tax threshold was “uncompetitive”, the Property Council claimed, and was triggered at an “inadequately low” site valuation of $3.1 million.
It wanted to increase the top land tax threshold to $6 million to drive an increase in investment, and implement a three-year trailing average of holding values to “smooth the impact of dramatic year-on-year increases in site valuation”.
“This is a big thing for us,” Djite said.
“The government gets the same money, but it gets it over time.”
The government spokesperson said it was “important to strike an appropriate balance between taxation and the community services South Australians expect”.
“The current land tax settings in South Australia were set by the previous Liberal Government. We went to the 2022 state election with an undertaking to maintain existing taxation settings,” he said.
“The Business Council of Australia has identified South Australia as the best place in the nation to do business for the third year running, citing our competitive tax, regulatory and planning settings.”
