As we move further into 2025, it is evident that recent trends in Australian investment activity and the industrial & logistics market are painting a promising picture for the nation’s future, with key indicators showing a surge in investor confidence.

Key activities in Australia’s industrial & logistics sector reveal positive signs, including stabilisation in the debt and leasing market and the continued expansion of data centre interest. Although the market is still experiencing the effects of construction costs, the industrial & logistics sector is set for further growth as demand continues. 

Debt markets have shown signs of stabilisation, largely due to the impact of elevated interest rates. These higher rates have played a crucial role in reining in inflation. The December quarter brought some relief with lower-than-expected inflation figures, prompting further rate cuts as seen recently.

“Institutional investors are closely monitoring these developments and are already factoring in to see rate cuts throughout 2025. This anticipation of lower rates is expected to be a catalyst for yield compression, as investors adjust their strategies to align with the changing economic landscape.” Mentioned, Trent Gallagher, National Director. 

The leasing market has also shown signs of stabilisation, with robust leasing activity marking the start of the first quarter of 2025. This resurgence in leasing activity is a positive indicator for the industrial & logistics market, suggesting a renewed confidence among businesses and investors alike.

Although positive activity is occurring across the Industrial & logistics sector, the construction industry is still experiencing challenges with costs. Elevated construction costs in some cases have led developers to hold off on large projects, creating a bottleneck in new developments. Despite these challenges, the industrial & logistics sector is poised for further growth as demand for these spaces continue to expand. 

The ongoing expansion of Data Centres within the Australian market is further supporting the demand for Industrial & Logistics space. “The expansion of this sector is not only increasing land sale activity but also pushing the industrial & logistics land sector to new heights, particularly in areas where access to large power supplies is achievable.” Said, Mr Gallagher. 

“As market conditions shift and the Industrial & Logistics sector shows promising signs, it’s essential to remain agile and responsive to emerging trends.” Continued, Mr Gallagher. 

Collaborating with experts who understand these market changes and their implications for your property and business decisions is crucial. Now is the ideal time to explore how you can benefit from the positive impacts occurring and understand key changes in the Industrial & Logistics sector. Reach out to a Colliers expert today to learn more.

Related Readings 

Australian Real Estate Investment Review and Outlook 2025 – Industrial & Logistics take aways – Colliers | The Industrialist

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Emerging Brisbane market headlines resurgent Industrial and Logistics sector - Colliers | The Industrialist