Industrial and logistics locations are not what they used to be. The strength of the sector coupled with growth in e-commerce, new technology and a strong focus on sustainability is driving major change.
As businesses continue to evolve, industrial parks need to adapt to suit their needs. Central locations, high levels of amenity and connectivity have become key considerations when choosing where to base business operations. There is also a growing demand for modern warehousing facilities that allow for flexibility and greater efficiencies. Several factors have led to this widespread movement towards the next generation of industry.
E-commerce and online shopping have been fast-growing sectors and are experiencing further demand due to COVID-19. According to the Australia Post 2020 eCommerce Industry Report, online shopping in WA has grown 78% year-on-year in April compared with 16% in 2019. While this is still a relatively young industry in WA, it has continued to drive larger warehouse requirements, with logistics operations seeking to maximise efficiencies in higher-quality warehouses with increased levels of amenity for employees and visitors including landscaping and food and beverage offerings.
In response to a change in the way businesses are operating, including shifts in technology and the increasing value being put on flexibility, industrial parks are becoming more mixed in their uses. We are seeing tenants consolidating their operations into one facility to help drive further operational efficiencies. Flexibility in how a business can use or expand in a space is key to ensure tenants and businesses are best placed to serve their customers.
Environmental and sustainability considerations are top-of-mind for both developers and tenants. The 56-hectare Roe Highway Logistics Park in Kenwick is leading the way in this space with a strategic, large-scale roll-out of solar solutions across warehouses, best practice water management and low embodied concrete and construction materials. In addition, a revegetation and conservation strategy has been implemented and the estate is on the path to become one of the first carbon neutral industrial parks in Australia.
In contrast to residential property, the industrial sector has been particularly resilient in recent years. Part of this strength is due to the industry servicing both growth and defensive parts of the economy, such as mining, oil and gas and e-commerce for non-discretionary goods. In WA, we have a unique advantage in the industrial space due to our location which helps align with international growth markets supporting resource-focused commodities.
The impact of COVID-19 has been relatively subdued in the Perth market when compared to the rest of Australia and particularly internationally. Certainly, in earlier parts of the year, some companies were looking to delay or defer their decision to lease or purchase industrial space. However, in WA we saw an increase in demand for both non-discretionary and discretionary goods through online shopping which continued to underpin a need for warehousing space. We are also fortunate enough to have a robust mining sector that was able to operate throughout the pandemic.
Figures released by the Australian Bureau of Statistics in September 2020 showed a 1.1 per cent growth rate in the WA economy for 2019-20, which reflects WA’s unique position to recover from the pandemic.
Owned by a consortium including Hesperia, Gibb Group and Fiveight (a company of Tattarang) Roe Highway Logistics Park was launched last year and is already 80% committed, with leading logistics and industrial services businesses including CHEP, Northline, Silk Contract Logistics, BP, Expro, KTrans, Expro Group and Brady Corporation. Key to the park’s success has been its prime location, both in terms of proximity to suppliers and access to major arterial transport routes, including road and rail.
Roe Highway Logistics Park is highly unique being the only coordinated rail-sided industrial estate to be developed in Perth in over a decade. Over 30-hectares of the site has direct access to the State Government’s Kenwick Rail Freight Facility, which is due for completion by mid-2021. The operational efficiencies that Roe Highway can generate for its tenants, by enabling containerised freight to arrive at their facility from the port by rail, is very exciting and provides our businesses with a real point of difference and competitive advantage. It is also one of the only industrial estates in Perth with unrestricted RAV7 B-Triple truck access throughout.
There is a global push at the consumer level towards cleaner and greener ways of doing business. We continue to see this mandated throughout the businesses and property sectors we work across, whether its industrial, residential, medical or commercial sectors, and this is a space that our business is particularly focused on.
In terms of industry, we also expect to continue to see a push towards higher, more automated warehouses with increased flexibility in terms of the spatial layout.
The future of the WA industrial sector is looking bright. With Australia, and in particular WA, emerging from COVID-19, demand for well-located, high-quality, long-term industrial assets is expected to continue to increase. A strong mining sector and proximity to international growth markets sets WA apart as a prime industrial location for businesses.
Roe Highway Logistics Park is 56-hectare development located in Kenwick. Offering RAV 7 truck accessibility and freight rail access, it is one of the best-connected industrial estates in Perth. To find our more or enquire about the last remaining land opportunities, visit - www.rhlp.com.au/
Sales: Anthony Vulinovich, Raine and Horne Commercial, 0411 516 343