Industrial property well placed to ride out COVID-19

Industrial property is well placed to ride out the short-term uncertainty which has been caused as a result of COVID-19, according to Colliers International.

The latest Colliers radar paper ‘COVID-19 Industrial Implications’ maintains that the recent growth in demand for transport and logistics as well as the key role industrial property plays in keeping the basic day to day necessities of Australians in supply, are key factors which will see the sector through the months ahead.

“Notwithstanding the short-term impacts, fundamentals within the Australian industrial and logistics market remain favourable with several structural and cyclical changes playing into the hands of the sector,” said Malcom Tyson, Managing Director, Industrial at Colliers International.

“Bringing it back to basics, the key drivers of the industrial market in recent years have been population growth, infrastructure investment, growth in e-commerce and low cost of debt.”

“Although population growth is expected to take a hit over the short term, as net overseas migration drops significantly off the back of travel restrictions and the closure of the Australian borders to non-citizens, the outlook for the other key drivers in the current environment remains unchanged.”

Colliers' paper notes that the e-commerce sector in particular, continues to expand structurally, and the coronavirus outbreak is expected to result in a pick-up in online retail sales and subsequent demand for industrial space.

“With stores adjusting their hours and political leaders asking the public to stay home, the value of e-commerce has increased exponentially,” said Luke Crawford, Associate Director, Research at Colliers International.

“Demand for large distribution and warehouse facilities is expected to continue its strong run over the past few years, particularly for last-mile locations; food companies, logistics companies, warehousing and to some extent manufacturing have shown how important they are in times of “social distancing” and keeping the supply chain open.”

“The panic buying of consumer staples during uncertain times like these has put food manufacturers and suppliers in the position of making sure their network of distribution and warehousing facilities are adequate to handle these types of demand spikes on a regional basis.”

It is expected that some companies may need to expand their industrial footprint in metro areas to keep up with the increased demand.
Highlighting this was the announcement in late March that Coles will open three ‘pop-up’ distribution centres in New South Wales, Victoria and Queensland to cater towards the rapid growth in food and grocery purchases.

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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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