19/11/2021 - 15:34

New players enter industrial market

19/11/2021 - 15:34

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Strong sentiment in industrial real estate in WA is bringing more first-time buyers to the market, industry experts say.

New players enter industrial market
Sarah Coxon, Chris Matthews, Megan McCracken and Benjamin Hartley. Photo: John Koh.

Strong sentiment in industrial real estate in WA is bringing more first-buyers to the market, industry experts say.

Speaking at a Property Council lunch, National Australia Bank director client coverage corporate and institutional Benjamin Hartley said the bank was seeing high volumes of transactions in the sector.

“The money flowing into industrial and logistics that has never been there before is huge,” he said.

“There has been a lot of movement into that space across the sector.”

He said transactions such as the recent $1.3 billion Jandakot airport deal between Dexus and Ascot Capital indicated the high levels of activity in the market.

He said fund managers were showing an increased amount of interest in industrial real estate, evidenced by the recent GPT Capital acquisition of industrial assets from WA’s Ascot Capital.

The recent NAB Quarterly Australian Commercial Property survey indicated buyer sentiment in industrial real estate was up 64 per cent on the previous quarter.

Coxon Group director Sarah Coxon said the relative COVID immunity, market resilience, plump rents and strong yields of industrial property was making it an attractive investment option.

Ray White joint managing director Chris Matthews explained that the Jandakot deal was a long time in the making.

“There was a mandate put out and when you get a mandate like that for a massive industrial portfolio, there’s not too much like it,” he said.

Ray White recently released some research indicating Perth’s industrial market was seeing lowering vacancies and appreciating face rents across all precincts and size ranges.

The real estate giant reported a total of 690,854 square metres of unoccupied stock currently available across the industrial market.

This compares to 12 months ago, when there was 1.1 million square metres of unoccupied industrial stock in Perth.

Freight and logistics council WA chair Megan McCracken said COVID had amplified the need for more industrial space, as labour shortages made it more difficult to transport goods in a timely manner, and e-commerce grew.

She said the supply chain issues affecting the freight and logistics sector were occurring before the pandemic, but are far worse now.

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