What does pre-lease rate mean for industrial construction?

The pre-lease rate is the percentage of space under construction that has already been leased to a tenant before the building is completed. A rate above 55% signals healthy absorption and limited vacancy risk. Below 40% suggests potential oversupply. The current U.S. average of 42% is below the 10-year average of 55%, indicating elevated supply risk in some markets.

Which market has the most industrial construction?

Dallas-Fort Worth leads all tracked markets with 62 million sqft under construction (Q1 2026), followed by Chicago (48M sqft) and Atlanta (42M sqft). These three Sun Belt/logistics-hub markets account for nearly 40% of total U.S. industrial construction. Among AU/NZ markets, Sydney leads at 1.8M sqm.

Is industrial construction slowing down?

Yes, in the U.S. The pipeline has contracted 22% from its 2023 peak as developers face higher financing costs, moderating demand, and rising vacancy. Construction starts dropped 35% in H2 2025. However, Australian (+12% YoY) and New Zealand (+8%) pipelines continue expanding from smaller bases, supported by tighter planning regimes and stronger pre-leasing.

Updated Q1 2026

Industrial Construction Pipeline 2026: New Supply by Market

385M sqft

↓ -22% from peak

U.S. under construction

42%

↓ Below 10yr avg of 55%

U.S. pre-lease rate

4.8M sqm

↑ +12% YoY

AU under construction

620K sqm

↑ +8% YoY

NZ under construction

Key findings

The U.S. industrial construction pipeline has contracted 22% from its 2023 peak as developers respond to rising vacancy and higher financing costs. At 385M sqft under construction, the pipeline remains elevated historically but is no longer accelerating.

Pre-lease rates are the key signal. Markets with sub-40% pre-leasing (Dallas, Atlanta, Chicago) face the highest risk of further vacancy increases. Markets above 60% (Los Angeles, Auckland, Tauranga, Hamilton) indicate supply is being absorbed by identified tenants before delivery.

Australia and New Zealand pipelines are growing (+12% and +8% YoY respectively), but from a much smaller base. Higher pre-lease rates in AU/NZ (avg 54%) vs the U.S. (avg 42%) reflect tighter speculative development controls and stronger occupier demand relative to available options.

The Tauranga market shows the highest pre-lease rate globally at 70%, reflecting near-zero existing vacancy and strong logistics demand from the Port of Tauranga, New Zealand's largest export port by volume.

Construction pipeline by market

Industrial construction pipeline by market
Market	Under construction	Pre-let	Delivery
Dallas-Fort WorthUS	62M sqft	35%	Q2-Q4 2026
ChicagoUS	48M sqft	40%	Q2-Q4 2026
AtlantaUS	42M sqft	38%	Q2 2026-Q1 2027
HoustonUS	35M sqft	45%	Q3 2026-Q1 2027
Los AngelesUS	18M sqft	62%	Q3-Q4 2026
SydneyAU	1.8M sqm	55%	Q2-Q4 2026
MelbourneAU	1.5M sqm	48%	Q2 2026-Q1 2027
BrisbaneAU	850K sqm	52%	Q3-Q4 2026
PerthAU	420K sqm	58%	Q3 2026-Q2 2027
AdelaideAU	280K sqm	45%	Q4 2026-Q1 2027
AucklandNZ	280K sqm	60%	Q2-Q4 2026
HamiltonNZ	120K sqm	65%	Q3-Q4 2026
ChristchurchNZ	95K sqm	50%	Q3 2026-Q1 2027
TaurangaNZ	75K sqm	70%	Q3-Q4 2026
WellingtonNZ	50K sqm	55%	Q4 2026

Pre-lease rates (absorption risk indicator)

Tauranga NZ

70%

Hamilton NZ

65%

Los Angeles US

62%

Auckland NZ

60%

Perth AU

58%

Sydney AU

55%

Wellington NZ

55%

Brisbane AU

52%

Christchurch NZ

50%

Melbourne AU

48%

Houston US

45%

Adelaide AU

45%

Chicago US

40%

Atlanta US

38%

Dallas-Fort Worth US

35%

Methodology

Construction pipeline data represents industrial/logistics buildings actively under construction (foundations poured or beyond) as of Q1 2026. Proposed or approved-but-not-started projects are excluded.

Pre-lease rates represent the share of under-construction space with signed leases or binding commitments. Build-to-suit projects are counted as 100% pre-leased.

U.S. data is in square feet (sqft). Australian and New Zealand data is in square metres (sqm). 1 sqm = 10.764 sqft.

Sources

JLL, Industrial Construction Pipeline Report Q1 2026 (US, AU) Accessed 2026-05-20.
CBRE, Industrial Development Pipeline Q1 2026 (US, AU, NZ) Accessed 2026-05-20.
Colliers, Industrial Development Tracker Q1 2026 (NZ, AU) Accessed 2026-05-20.

Cite this report

SCAYLED (2026). Industrial Construction Pipeline 2026: New Supply by Market. Retrieved from https://scayled.com/data/industrial-construction-pipeline-2026

Free to quote with attribution. Creative Commons CC BY 4.0.

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Frequently asked questions

Approximately 385 million square feet of industrial space is under construction across the U.S. as of Q1 2026, down 22% from the 2023 peak of 495 million sqft. Dallas-Fort Worth leads with 62M sqft, followed by Chicago (48M) and Atlanta (42M). The national pre-lease rate is 42%, meaning 58% of new supply will need to find tenants after delivery.

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