The Colliers ‘Australian Real Estate Investment Review and Outlook 2025’, reveals that key signs evident throughout 2024 indicate that 2025 is going to be all about market revival. Below captures some of the key take aways from the review for the Industrial & Logistics sector. 

“Industrial &logistics (I&L) fundamentals remain healthy, driven by favourable vacancy rates and rents rebasing to a more sustainable growth trajectory, despite a moderating leasing market driven by economic headwinds.” Mentioned, Gavin Bishop, Managing Director, Industrial & Logistics and Head of Industrial & Logistics Capital Markets | Australia.

The Australian I&L property capital markets are experiencing a period of normalisation, shifting away from the opportunistic investment strategies that characterised the previous market cycle.

“As leasing markets normalise and rental growth moderates to more sustainable levels, I&L assets are increasingly aligning with the preferences of core investors seeking predictable cash flows, lower-volatility, and long-term returns. As a result, 56 per cent of the total traded volume in 2024 was either for core or core plus transactions.” Mr Bishop Said. 

Domestic institutional investors, often in partnership with offshore capital, emerged as the most active buyers in 2024. This has been driven by the re-engagement of superannuation fund investors and an uptick in interest from international investors. 

“Looking forward, 2025 is likely to see the re-entry of core capital into the sector as leasing conditions normalise, with an emphasis on strategically located infill assets in established markets, backed by high-quality tenant covenants.” Mr Bishop Mentioned. 

“Prime logistics assets with modern specifications and sustainable design integration are expected to receive significant interest from active capital,” 

The Australian Industrial & Logistics sector continues to offer some of the lowest vacancy rates globally, with resilient occupier demand. Whilst rental growth will moderate in 2025, we expect to see 8-10 per cent rental growth in infill, land constrained, and established markets along the East Coast.

“The availability of zoned serviced industrial land will keep supply levels low and assist medium-term rental growth. Once interest rates decrease, we expect further core capital to enter the market which will lead to yield compression.” Mr Bishop Said.

Reach out to Colliers Industrial & Logistics experts or the link below to access the latest Capital Markets Investment Review report and further insights on I&L and other asset classes. 

Investment Review: https://www.colliers.com.au/en-au/research/australian-investment-review-2025