Australian industrial investors and occupiers remain positive

The Australian industrial logistics market remains a key focus for investors, with the outlook for the sector remaining relatively positive, according to the Colliers International Industrial Investment Survey. 

Colliers’ survey results found that 89% of Australian industrial investors favoured the logistics sector over other commercial sectors, with 43% of investors intending to acquire their next industrial asset within the next six months.

The Industrial Investment survey also found that just 15% intend to divest their assets over the same period, highlighting that the mismatch between supply and demand will remain.

“Despite recent market uncertainty, 89% of investors surveyed expect the market to stabilise in around 12 months,” said Malcom Tyson, Managing Director, Industrial at Colliers International.

“In the interim, just over half of investors (54%) believe capital values will fall by up to 10%, with 64% are expecting cap rates to soften by up to 50 basis points.”
“Sydney and Melbourne remain the focus cities for investors with almost 60% of investors saying they are very likely/likely to invest in these capital cities within the next 12 months.”

The survey found that almost 78% of investors see tenant solvency and the re-pricing of assets as the biggest challenge facing investors amid the current health crisis.
The positive sentiment was also echoed by industrial occupiers; Colliers International found that 21% of occupiers surveyed reported minimal impact on their business as a result of COVID-19, with nearly three quarters already having a risk management plan in place. 

“Occupiers remain optimistic about current trading conditions with 53% expecting their volume of business to be better off or the same as it is now over the next three months,” said Luke Crawford, Associate Director, Research at Colliers International.

“Similarly, 75% expect their workforce to remain the same or grow over the next 24 months. To achieve efficiencies and better respond to the impacts of COVID-19 on their business, 85% of occupiers have reviewed their supply chain network, while 30% plan to relocate to a bigger warehouse over the next year.”

The survey found that the biggest impact of COVID-19 on industrial occupiers has stemmed from revenue loss, increased cost of doing business and idle capacity which collectively impacted 55% of businesses. 

Read the results of Colliers' Industrial Investor Survey here.

Read the results of Colliers' Industrial Occupier Survey here.

 

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Malcom Tyson

Managing Director | Industrial

Sydney CBD

Malcom joined Colliers International in 1994 in the North Sydney office as an industrial sales and leasing agent. Colliers International is known in the market for their progressive, collaborative and innovative culture, and he was very determined to join their team. Now as a leader in the business, he facilitates that collaboration across our service lines both domestically and internationally to achieve our goals. Over his 26 years at Colliers, Malcom has developed and grown multiple teams; his current role is Managing Director of Industrial where he heads up the largest and most specialised industrial division in Australia.

In 2005, Malcom joined the ANZ Executive where the leadership group has steered Colliers International to reach incredible growth and further developed our brand and client offering. Malcom became the NSW State Chief Executive in 2006, and leads the 730+ staff in the NSW team across six offices and dozens of on-site management teams. Our NSW business is the Centre of Excellence for the broader Australia and New Zealand teams, and our team leads the business in innovation and best practice.

Malcom's speciality is the sales and leasing of institutional-grade industrial property, and he works to provide his clients with insights into the future of industrial property and where they can reap the most value. Having sold over $6bn+ of property over my career,  Malcom gets a great deal of satisfaction being a trusted advisor and expert for his clients.

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Luke Crawford

Associate Director

Sydney CBD

Luke has eight years’ experience in property research and real estate advisory, providing strategic advice and research to private, government and listed groups. Luke’s current focus at Colliers International is industrial research nationally, where he provides high quality research and advice on the trends impacting the sector to both internal business lines and clients.

Prior to joining Colliers International, Luke has held roles within the Real Estate Advisory Services (REAS) division at KPMG and the Research and Consultancy team at Knight Frank.

Luke’s areas of expertise include property research, demographic assessments, highest and best use analysis and supply and demand assessments across a broad range of property sectors including industrial, office, residential, student accommodation and retirement and aged care.

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