Optimistic outlook for Australia’s logistics sector

Australia’s industrial and logistics occupiers are generally optimistic about the future and expect their businesses to be better off financially in the next 12 months, an inaugural survey carried out by commercial real estate services and investment firm CBRE found.

The Australian Industrial and Logistics Occupier Survey was undertaken to gain a better understanding of decision-making drivers, occupier strategies and how changes in technology and automation are impacting real-estate requirements.

Kate Bailey, Senior Research Manager, CBRE, said the results reflected an engaged and optimistic industrial and logistics market, with 66 per cent of respondents expecting their business to be better off financially and 25 per cent expecting things to stay the same over the next 12 months.

The retailing, warehousing and distribution sector were the most positive, with 86 per cent of respondents expecting their business to be better off.

“Surveys of this kind have rarely been undertaken in the Australian industrial and logistics market, meaning there has been limited benchmarking of what drives occupiers’ decision making,” said Bailey.

Manufacturers were found to be the most likely to want a smaller occupancy, with 21 per cent preferring a smaller footprint. This was possibly reflective of the shift towards high-tech manufacturing, which was less floorspace intensive, Bailey said.

CBRE Senior Managing Director, Industrial & Logistics, Matt Haddon, said the survey also highlighted key trends and attitudes in relation to sustainability, e-commerce, new development practices such as multi-storey warehousing, and the drivers behind occupiers’ site selection criteria.

“It is likely that the drive to incorporate sustainable design elements in industrial and logistics assets will continue to be led by the owner-occupier sector, with this group most likely to amortise initial expenses such as solar panels and wind turbines and see the flow on benefits from sustainable demand first hand,” said Haddon.

When it came to e-commerce, one of the more surprising findings was that the impact was yet to be fully realised in the sector, with 42 per cent of respondents indicating that they had seen no change from the growth of e-commerce in the past five years.

In relation to multi-storey warehousing, the survey found that while there was a high level of awareness from respondents (90 per cent) only 25 per cent of respondents would consider this style of asset.

The level of appeal was higher amongst retail/warehousing and wholesaling occupiers (50 per cent appeal, 50 per cent consideration) and lower amongst manufacturers (20 per cent appeal, 17 per cent consideration) – possibly due to the high cost of specialised machinery and equipment.

Turning to site selection, the survey found that access to road networks, key transport infrastructure and skilled employees had the highest level of perceived importance when selecting an industrial or logistics property.