Industrial to remain standout sector

Industrial property is expected to remain the standout sector into 2024 and beyond, with about $55 billion waiting to be deployed into the sector nationally.

Cushman & Wakefield’s latest research found that industrial property transaction levels had decreased in Western Australia this year, but economic indicators pointed to higher volumes next year.

Industrial property has performed well since the onset of the pandemic, as supply chain issues and a growth in e-commerce has made warehousing and logistics more popular.

In 2023, significant transactions (above $10 million) accounted for $132.7 million invested in WA industrial property, underpinned by the $64.5 million sale of the Kewdale Coca-Cola factory.

This compared with $422.2 million in 2022 and $1.5 billion the year prior.

Charter Hall’s $422.2 million acquisition of Roe Highway Logistics Park and Dexus’ $1.3 billion purchase of Jandakot Airport and surrounding assets, dominated 2022 and 2021 respectively.

Cushman & Wakefield national director and WA head of industrial and logistics Nick Goodridge said he believes that WA’s industrial property sector would remain strong for the next five years.

“Fundamentals in the WA industrial and logistics sector are solid, resulting in it being identified as the most resilient and defensive of the mainstream commercial asset classes since the pandemic, underpinned by the demand side of the equation,” he said.

Mr Goodridge added that over the past two decades, Australia’s industrial sector has generated an annual total return of 11.7 per cent, compared with office and retail at 9.5 per cent and 8 per cent respectively.

Cushman & Wakefield’s research has identified $55 billion of capital seeking industrial and logistics assets in Australia.

“Capital is assessing opportunities and is ready to deploy; however, the ongoing struggle to trigger activation given market conditions remains a hurdle´ Cushman & Wakefield executive director and head of industrial and logistics Australia and New Zealand Tony Iuliano said. 

“Coupled with the privately held nature of the WA market, barriers to entry into the west will continue to be in force.”