MHD INDUSTRIAL PROPERTY
STOCKLAND EXPLAINS WHAT’S DRIVING THE LOGISTICS BOOM S
Stockland explains to MHD the booming industrial property sector, the resilient logistics industry, and the growing e-commerce trend – with expert insight from the company’s NSW Logistics Regional Manager and Head of Property Management, Robert Salerno.
ince March 2020, COVID-19 lockdowns have driven a boom in logistics, fuelled by the accelerated adoption of e-commerce. The industrial sector, including logistics, has proven more resilient to the impacts of COVID-19 than other property sectors. This has made the need for resilient supply chain management, warehousing, and distribution more important than ever before. Growth in online retail and changing customer expectations has created fundamental structural change in the demand for industrial land. We estimate that for every $1 million increase in retail turnover, an additional 220 sqms of industrial property is demanded in Australian Eastern Seaboard capitals Deloitte 2020). From 2020 through to 2030, e-commerce is expected to account for a third of additional industrial floorspace. This compares to just 15 per cent over the past decade (Deloitte 2020). Our research on industrial tenant demand indicates staggering growth across Eastern Seaboard cities, set to incrementally increase 3.26 million sqms by 2030 (Deloitte 2020).
Although the clearest and mostpowerful driver is the rapid uptake of e-commerce/online shopping, there are multiple other factors including the development of omni-channel retail and the evolution of supply chain strategies for sourcing and inventory locations. Inventory stock levels are expected to rise as tenants seek to build greater resilience into their supply chains. Longer-term influences include population and economic growth. Domestic GDP and population growth drives consumer and business expectations on spending, production, and inventory levels. The federal government’s $1.5 billion in funding to support local manufacturing industries will further bolster industrial production and the need for logistics space (Source: AAP/ Mick Tsikas). International trade and port volumes also keep demand for logistics property high. Being a net importer of goods and services, import growth in Australia is expected to return to pre-COVID-19 levels over the next decade, further contributing to continuing demand for industrial floorspace.
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We offer our customers technologically advanced locations with excellent accessibility. This is the most important aspect. Consumers are hungry for goods and services to be delivered as quickly as possible. That places an emphasis on the importance of having welllocated infrastructure.
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Growth in online retail and changing customer expectations has created fundamental structural change in the demand for industrial land.
MHD APRIL 2022 | 15
