As e-commerce accelerates consumers’ online shopping demand, industrial multi-storey investments are experiencing rapid growth in strategic infill locations to maximise instant access to customers, Colliers’ Australian Industrial & Logistics (I&L) review says. Indeed, higher population density locations can translate into significant savings associated with transportation costs as delivery times are then reduced.  

“When available land becomes a rare gem to acquire in an Australian tightly held market, multi-storey developments encourage a viable solution to reduce urban sprawl’s footprint, alongside other positive outcomes.” Mentions Gavin Bishop, Managing Director, Industrial & Logistics & Head of Industrial Capital Markets | Australia.

Tenants and investors are strongly analysing these factors, which explains why they tend to prioritise their geographic footprint over rent costs and capitalise in vertical warehouses. The Industrial and Logistics review offers an interesting perspective by cementing an analysis of what types of occupiers are more suited to a multi-storey asset versus the need for a single-storey.

“Indeed, whilst the main motive is unarguably to be strategically placed in infill locations, other components might influence the decision-making process such as the future occupier’s business operations, the goods, or services they offer, and so on.” Mr Bishop said.

According to the review, future-proofed and ESG credential assets are set to provide a fit-for-purpose and sustainable build that meets the requirements of future generations and economies. It is also aligned with the strengthening of upcoming national government frameworks and strategies supporting the safeguarding of Australia’s biodiversity heritage, whether it is in an urban or natural context.

Although large-scale industrial sites can represent an example of negatively reshaping Greenfields, vertical architecture can strongly be linked to ESG’s considerations in a climate crisis and a rapid urban spread context. It prioritises a clever use of land space providing an answer towards matters directly linked to anthropisation while combining renewable energies alongside ecological solutions.

“While the review highlights the following ESG pillars which are solar, carbon neutral developments, and social factors, the industrial and logistics sector can become a sustainable leading voice by incorporating nature-based solutions along its built and supply chain process.” Mentions Mr Bishop

As an ESG benchmark asset, The YARDS in Kemps Creek, Sydney, sets the tone. It is the first industrial estate to achieve a 6 Star Green Star Communities rating from the GBCA and has reduced up to 78% in carbon emissions from traditional style warehousing. The $1 billion asset is a joint venture by Frasers Property Industrial, Barings and Aware Real Estate.

Additionally, green finance practices are evolving, encouraging investors to implement sustainable resolutions. The review stipulates that by 2025 green loans could comprise 20% of the $75 billion in commercial property debt refinanced in Australia each year.

Nature-based solutions in the I&L sector are an infinite source of inspiration. Indeed, to name only a few, bio-sourced materials, attractive landscaping for the local fauna and flora, solar energy, ecological solutions implemented as a core business strategy. These economically viable alternatives enhance biodiversity gain, energy efficiency, and human ecosystemic benefits while reducing carbon footprint with integrity. It paves the way from ‘Brown to Green’ for the Industrial and Logistics Sector.

Reach out to Colliers Industrial & Logistics experts or the link below to acces the latest Capital Markets Investment Review report and further insights.

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