The logistics industry is facing unprecedented market conditions, bringing demand for high quality, well-located industrial property to an all-time high.
Executive General Manager, Logistics, Tony D’Addona explains, “When it comes to property, the golden rule has always been about location and in logistics, it’s paramount – the industry is estimated to move four billion tonnes of goods across Australia and employs more than 1.2 million workers1, given the issues that we have faced through the pandemic, being close to economic centres where customers and workers reside is critical”.
As the Australian e-commerce sector continues to grow, so does the demand for logistics property with good access to major consumer markets.
Doubling down on demand
Consumers’ expectations on free shipping, fast delivery, and free returns are creating mounting pressure on retailers and third-party logistics providers whose requirements for space and speed to market are rapidly expanding1.
In a recent report2, CBRE cites that for A$1 billion of additional e-commerce sales, an additional 70,000sqm of logistics space is needed and to offset the cost of adopting a just-in-case (JIC) inventory strategy, lowering transport costs will be a strong focus area for many logistics occupiers.
“You need to be close to road, rail and ports but you also need to be close to your end user, whether that is a business or consumer,” Tony continues.
Evidence of these market conditions can be seen throughout our logistics portfolio where vacancy rates are sitting an all-time low.
Asset Manager, Ian Sutcliffe, has seen high levels of interest and engagement from customers, “It has been great to deliver on our value proposition of being a trusted property partner for multiple tenants who have expanded their operations across our portfolio”.
“We’re also seeing tenants proactively entering renewal negotiations and exercising options much sooner than in previous years given our properties are well-located within strategic logistics hubs” he continues.
Location, location, location
In another CBRE report3, immediate order fulfilment and lack of land supply are dictating warehouse location decisions. While infill locations that can service same-day deliveries can generate premium rents, there are increasing opportunities for several last mile locations as populations grow and disperse.
Our properties are strategically positioned close to major consumer markets, infrastructure, and employment.
“Yatala Distribution Centre is a prime example of how location is key in the logistics sector. The modern estate benefits from its location within one of South East Queensland’s best logistics hubs having the flexibility to service both the Brisbane and the Gold Coast markets,” says Tony,
“Most of our assets are in middle ring suburbs or close to major distribution arteries in Sydney, Brisbane, and Melbourne. We have invested near major existing population nodes and future growth corridors,” he continues.
The strongest link in the supply chain
We’re leveraging our multi-sector capabilities to build on our already strong portfolio of 29 properties across Australia. And with a ~$6.4 billion development pipeline4 to create the next generation in logistics facilities, Stockland is perfectly positioned to help drive success for our customers.
- Past lessons shaping the future, MHD, 21 November 2022
- Logistics Special Report, The Australian, 23 November 2021
- Sydney Industrial & Logistics Land Supply, CBRE, September 2021
- Brisbane Industrial & Logistics Land Supply, CBRE, December 2022
- Property Portfolio, Stockland, June 2022
- Forecast end value on completion – Stockland FY22 Results