Industrial market: All we want for Christmas is land

More land for future development is on the Christmas wish-list for Australia’s industrial property market.

Market experts believe logistics companies on the hunt for locations close to road, rail and port hubs will help drive the market in 2014.

They also say there’s more confidence starting to return to the industrial property market.

“Every year seems to be getting better and the overall confidence is growing. Twelve months ago there was still media articles on negative global economic conditions which did not assist with overall business confidence,” says Knight Frank’s Managing Director, Industrial, Greg Russell.

Andrew Maher, Jones Lang LaSalle’s National Director of Corporate Industrial Solutions, believes corporate occupiers have weathered the storm and set themselves up for growth.

“Leasing activity has therefore improved. Speculative development has been a key contributor to market activity in the final quarter of the year – something that was absent from the final quarter in 2012.”

Maher believes industrial and logistics companies will “continue to seek out more efficient real estate in a location that optimises their supply chain”.

“This will bring about an increased level of take-up for purpose built facilities along with heightened activity in the speculative development market,” he says.

Colliers International Managing Director, Industrial, Malcom Tyson, says accessing good land for future development is emerging as a key challenge.

“Suitable land is in short supply, due to suitable assets not being on the market, not zoned correctly or not serviced,” he says.

“Occupiers have also had difficulty in forecasting growth requirements leading to a watching brief, rather than a lot of activity.  This has, in part, been a result of the uncertainty in business confidence leading up to and over the federal election.”

But Tyson says the fundamentals for 2014 are positive. “There is low vacancy, increasing demand from occupiers, limited new supply coming online and a good supply of capital seeking industrial assets,” he says.

Tyson expects logistics specialists to be active in the market in 2014, after a series of large transactions in the second half of 2013.

He is tipping further large transactions in 2014, with locations to watch including Derrimut, Laverton and Truganina in Melbourne, Eastern Creek and Erskine Park in Sydney, Larapinta and Yatala in Brisbane’s south-west, the Australia TradeCoast, Direk in South Australia and Hazelmere in Western Australia.