'Mini-warehouses' adding affordabile alternative in industrial market: Colliers International

‘Mini-warehouses’ are being developed to more affordable options in the industrial market, a new report says.  

The Colliers International report said developers were responding to demand from smaller industrial users looking for assets at lower costs, said Malcom Tyson, Managing Director, Industrial at Colliers International. 

“As the economy grows, the dynamics of the industrial market have been evolving and therefore requirements for industrial space have been diversifying,” said Tyson.

“In particular, it is the growth of small businesses which employ nearly half of Australia’s workforce and generate one fifth of Australia’s GDP, that has triggered a rising demand for strata spaces.”

Australia’s industrial property is in high demand from both domestic and international investors, said Alex Pham, Director of Research at Colliers International.

“Industrial land values have experienced, and will continue to see record growth rates being driven by fierce competition for developable sites and an unprecedented level of investment.”

“With a significant pipeline of infrastructure development yet to be delivered, we can expect industrial value uplifts to continue to be supported by major infrastructure projects, boosting the efficiency of industrial operations.”

The main summary findings of the report were:

Summary:

• From both domestic and global contexts, demand for industrial property is being fuelled by Australia’s robust economic conditions, which continues to be underpinned by a confluence of fundamental factors, including;
  
  
• Strong growth in the global economy on the back of increases in global industrial production and trade - particularly across the Asia Pacific region,
  
  
• The positive spillover effects from increased investment in public infrastructure,
  
  
• The improvement in business sentiment (both globally and domestically) and rising non-mining business investment,
  
  
• A sustainably low interest rate environment,
  
  
• A relatively low Australian dollar, boosting net exports,
  
  
• Strong rates of population growth, with the five-year projection (estimated at 1.6% per annum) doubling the average of the world’s top 30 economies.