To gain insights into the current Industrial climate and the role of data in navigating the market, LandChecker interviewed key figures from Cushman & Wakefield: David Hall, National Director and Head of Logistics & Industrial - Brokerage, and Luke Crawford, Head of Logistics & Industrial Research.

Q&A: Navigating the Industrial Market in Today’s Economic Climate

How is the current economic climate impacting the Industrial market?

Despite the current economic headwinds, the Logistics and Industrial (L&I) sector has shown considerable resilience and continues to perform well. While demand has normalised in 2024 due to a slowing of the economy, it continues to outpace historical benchmarks.

Cost of living pressure has resulted in consumers spending less, which is impacting the expansion plans of some occupiers. However, we are beginning to see positive real income growth now that inflation is moderating, and in tandem with recent income tax cuts, consumer consumption is expected to improve. Other factors that are impacting the sector include continued supply chain uncertainty, given a spike in global shipping costs, albeit this is resulting in occupiers continuing to hold buffer stock within their portfolio. 

Positively, population growth remains significant, with over 650,000 people added over the past 12 months. The impacts of population growth cannot be understated for the sector, given the downstream impacts on goods and services, while new dwellings to house these residents will also drive greater warehouse demand.

Are there any trends or changes in the Industrial market that are influencing your current strategy?

The key trends we are currently seeing are:

• More leasing options for occupiers: We are noticing a rise in vacancy rates in some markets due to speculative supply additions. For occupiers, this is creating the best leasing conditions since 2019; however, the window of opportunity could be short lived as supply remains challenged by capital constraints, planning issues and high construction costs.
• Sustainability push: There is a continued shift to sustainability from both occupiers and owners. Sustainability is increasingly being incorporated into new building designs and is mandated by building codes as part of the design process. This includes being solar energy-ready from day one for 20% of the roof area.
• Focus on automation: While the shift to automation has occurred in various forms over the past two decades, the rate of take-up in recent years has accelerated and reflects a combination of a drive for efficiencies and declining investment costs, which have driven faster returns on investment.
• Supply chain resilience: Recent disruptions have highlighted the importance of robust and resilient supply chains. This has resulted in businesses undertaking a thorough review of their supply chains, and outcomes have been leveraging digital tools to better manage risks and ensure continuity.

How have you adapted to meet these trends?

Cushman & Wakefield have adapted by employing a data-driven approach to engage with clients effectively. As supply increases in some markets, we are using this opportunity to help clients find the best real estate solution. Our Capital Markets team, with its extensive knowledge of global capital trends, is well-positioned to identify and leverage new opportunities for our clients.

Where do you see the big opportunities for the Industrial market for this year and beyond?

The sector will continue to benefit from structural tailwinds and positive macroeconomic trends such as ongoing population growth. Other trends and opportunities include: 

• Advanced Manufacturing: The rise of technologies like 3D printing, robotics, and AI is revolutionising manufacturing processes. These advancements enable more efficient production, reduced costs, and allow for greater customisation.
• Sustainability and Green Technologies: The push for sustainability practices will continue to become pronounced as occupiers look to meet carbon reduction targets. To meet these targets, adoption of renewable energy sources, energy-efficient buildings sustainable supply chain practices will be vital.
• Digital Transformation: The integration of IoT, big data, and cloud computing will continue to transform warehouse operations. These technologies are improving predictive maintenance, optimising supply chains, and enhancing overall operational efficiency.
• Healthcare and Biotech: The healthcare and biotech sectors are seeing significant investment, driven by advancements in medical technology and an aging population. This will continue to lead to increased demand for specialised Industrial facilities, such as cold storage.

How is Landchecker helping you navigate the current market?

We have now been using Landchecker for more than seven months and have found it is instrumental in helping us stay updated with markets in outer regions, such as Pakenham in Victoria. The platform facilitates efficient document management, including ordering title searches and company searches, and provides valuable up-to-date aerial imagery with a wide range of planning data laid over the top.

Which challenges does Landchecker help overcome?

Crucially, Landchecker saves us time. The team has everything they need in the one spot so they’re able to be nimble and understand contextual data very quickly, as well as pull up a site and view recent aerial photography without needing to drive out to an asset. Landchecker has simplified the process of assessing a property by collating all the data we need and enabling us to quickly grab a title where needed.

Vendors and buyers are always becoming more sophisticated - Landchecker allows us to stay on the front foot by accessing the most up to date data available and this platform provides a visual tool to fully understand site characteristics. 

What particular functions of Landchecker does your team use?

Our team uses several key features of Landchecker, including high-resolution aerial imagery, the distance tool, the area tool, and the ability to order documents such as title searches and plans of subdivision. Having Development Applications and their status on the map is quite key to understanding pipeline and precedent.

How do different team members use the Landchecker platform differently?

Different team members use Landchecker based on their roles. Naturally, our analysts are heavy users of the platform but all of our agents are very well versed in data and technology too. Some focus on Document Searches, while others use aerial imagery to assess a property’s location, the age of buildings, and proximity to amenities or infrastructure.

More LandChecker Reading:

Revolutionising Real Estate: How Technology is Shaping Property Sales | Commo.

The outlook for the Australian development industry is shifting  | The ASEAN Developer

Click here to sign up to access your Landchecker trial today