Property Sector Spotlight: Industrial & Logistics

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.

Investment advantages

▪ 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.

Target Distribution Centre, Foundation Road Truganina VIC Independent Certifier, Development Monitoring & Quantity Surveying – 62,000m2 Client: ESR/CIP & Charter Hall

Toll Mars Distribution Centre, Midwest Logistics Hub, Truganina VIC Independent Certifier, Development Monitoring, Quantity Surveying & Tax Depreciation Assessment – 45,000m2 Client: Charter Hall

Uniqlo Distribution Warehouse, Midwest Logistics Hub Truganina VIC Independent Certifier, Development Monitoring, Quantity Surveying & Tax Depreciation Assessment – 35,000m2 Client: Charter Hall

Mainfreight Epping 107 Gateway Boulevard Epping VIC Quantity Surveying – 45,000m2 Client: Mainfreight

Drystone Industrial Estate Truganina VIC Technical Due Diligence – 44,000m2 Client: GPT

Telstra Data Centre Clayton VIC Acquisition/Divestment Technical Due Diligence – 3.2 hectare site Client: Telstra / Centuria

Aldi Distribution Centre Portfolio Acquisition/Divestment Technical Due Diligence – 370,000m2 Client: Aldi / Charter Hall Allianz

99 Sandstone Place Parkinson QLD Technical Due Diligence – 54,000m2 Client: DWS Group GmbH & Co

338 Bradman Street Acacia Ridge QLD Technical Due Diligence – 55,000m2 Client: Mapletree

Lot 30, 247-263 Greens Rd Dandenong South VIC Quantity Surveying & Tax Depreciation Assessment – 16,000m2 Client: Logis Property Investments

Ceva Logistics Truganina VIC Independent Certifier, Development Monitoring, Quantity Surveying – 36,000m2 Client: Frasers Property

Salta Properties Portfolio Dandenong South VIC Quantity Surveying & Tax Depreciation Assessments – 4 industrial warehouses 25,000m2 Client: Salta Properties

7 Dursley Road Yenora NSW Development Monitoring, Quantity Surveying and Tax Depreciation Assessments – 65,000m2 Client: Fife Capital

9-13 Cool Street Forestville NSW Development Monitoring and Quantity Surveying – 9,000m2 Client: Trumen Corp Pty Ltd

8 Narabang Way Belrose NSW Development Monitoring and Quantity Surveying – 4,000m2 Client: Life Property Group

50 Elwell Close Beresfield NSW Development Monitoring, Quantity Surveying and Tax Depreciation Assessments – 8,000m2 Client: Hobson Holdings Pty Ltd

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:

MELBOURNE
Rob Howells, Managing Director  |  0437 649 082  |  rhowells@napierblakeley.com
Craig Smith, Director |  0407 371 664  |  csmith@napierblakeley.com
John Mathew, Director  |  0414 559 326  |  jmathew@napierblakeley.com
Ian Gardner, Associate Director  |  0488 225 569  |  igardner@napierblakeley.com

SYDNEY
Alastair Walker, Director  |  0419 503 289  |  awalker@napierblakeley.com
Peter Hammond, Director  |  0419 980 901  |  phammond@napierblakeley.com
Peter Osborn, Director  |  0439 765 571  |  posborn@napierblakeley.com
Stephen Cooke, Associate Director  |  0409 228 552  |  scooke@napierblakeley.com

BRISBANE
Adam Greene, Associate Director  |  0409 724 395  |  agreene@napierblakeley.com
Paul Cosker, Associate Director  |  0434 400 107  |  pcosker@napierblakeley.com
Gavin Peach, Associate Director  |  0412 225 781  |  gpeach@napierblakeley.com
KY Pih, Associate  |  0408 933 660  |  kpih@napierblakeley.com

PERTH
Graham Rigby, Associate Director  |  0419 847 998  |  grigby@napierblakeley.com
Jorden Morris, Quantity Surveyor  |  0457 001 545  |  jmorris@napierblakeley.com

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