THE industrial & logistics property sector became the hot favourite in 2020, outperforming all other property types.
The rise of e-commerce has driven major brands to expand their footprint and therefore leasing activity. Vacancy rates are at all-time lows and major development work is underway to meet demand. Several AREITS are continuing their growth in this asset class and Transaction volumes were up to $3.5 billion in 2020, from $2.3 billion in 2019 – as recently reported.
So, what makes the sector tick? Here are some attributes and advantages of the sector from our perspective.
Construction and development advantages
▪ Over time construction costs in the sector have been less susceptible to escalation than other asset types. This stability provides greater confidence to Developers when planning their next project.
▪ The speed of construction enables Developers to receive a return on their investment earlier than most other forms of development.
▪ Tried and tested construction techniques in the sector generally lead to less variations than other forms of construction.
▪ There are also tax depreciation benefits available to developers / investors upon project completion.
▪ Typically, industrial & logistics properties are leased to a single tenant who has responsibility for repairs, maintenance and lease expiry make good obligations.
▪ Relatively low levels of capital expenditure are required during the lease term.
▪ There are good opportunities for environmental and social governance (ESG) initiatives. Both new developments and building improvement projects are taking up energy efficient strategies such as photovoltaic solar systems, rainwater harvesting, zero ozone depleting refrigerant choices, high efficiency air conditioning, time and presence controls and metering.
The following projects represent some of our recent capabilities and expertise within the sector, where we have managed Cost, Risk & Return.
Please do not hesitate to call any of the people below to discuss your requirements:
Rob Howells, Managing Director | 0437 649 082 | firstname.lastname@example.org
Craig Smith, Director | 0407 371 664 | email@example.com
John Mathew, Director | 0414 559 326 | firstname.lastname@example.org
Ian Gardner, Associate Director | 0488 225 569 | email@example.com
Alastair Walker, Director | 0419 503 289 | firstname.lastname@example.org
Peter Hammond, Director | 0419 980 901 | email@example.com
Peter Osborn, Director | 0439 765 571 | firstname.lastname@example.org
Stephen Cooke, Associate Director | 0409 228 552 | email@example.com
Adam Greene, Associate Director | 0409 724 395 | firstname.lastname@example.org
Paul Cosker, Associate Director | 0434 400 107 | email@example.com
Gavin Peach, Associate Director | 0412 225 781 | firstname.lastname@example.org
KY Pih, Associate | 0408 933 660 | email@example.com
Graham Rigby, Associate Director | 0419 847 998 | firstname.lastname@example.org
Jorden Morris, Quantity Surveyor | 0457 001 545 | email@example.com