Optimistic outlook for Australia's logistics sector

Australia’s industrial and logistics occupiers are generally optimistic about the future and expect their businesses to be better off financially in the next 12 months, an inaugural survey carried out by commercial real estate services and investment firm CBRE found.
The Australian Industrial and Logistics Occupier Survey was undertaken to gain a better understanding of decision-making drivers, occupier strategies and how changes in technology and automation are impacting real-estate requirements.
Kate Bailey, Senior Research Manager, CBRE, said the results reflected an engaged and optimistic industrial and logistics market, with 66 per cent of respondents expecting their business to be better off financially and 25 per cent expecting things to stay the same over the next 12 months.
The retailing, warehousing and distribution sector were the most positive, with 86 per cent of respondents expecting their business to be better off.
“Surveys of this kind have rarely been undertaken in the Australian industrial and logistics market, meaning there has been limited benchmarking of what drives occupiers’ decision making,” said Bailey.
Manufacturers were found to be the most likely to want a smaller occupancy, with 21 per cent preferring a smaller footprint. This was possibly reflective of the shift towards high-tech manufacturing, which was less floorspace intensive, Bailey said.
CBRE Senior Managing Director, Industrial & Logistics, Matt Haddon, said the survey also highlighted key trends and attitudes in relation to sustainability, e-commerce, new development practices such as multi-storey warehousing, and the drivers behind occupiers’ site selection criteria.
“It is likely that the drive to incorporate sustainable design elements in industrial and logistics assets will continue to be led by the owner-occupier sector, with this group most likely to amortise initial expenses such as solar panels and wind turbines and see the flow on benefits from sustainable demand first hand,” said Haddon.
When it came to e-commerce, one of the more surprising findings was that the impact was yet to be fully realised in the sector, with 42 per cent of respondents indicating that they had seen no change from the growth of e-commerce in the past five years.
In relation to multi-storey warehousing, the survey found that while there was a high level of awareness from respondents (90 per cent) only 25 per cent of respondents would consider this style of asset.
The level of appeal was higher amongst retail/warehousing and wholesaling occupiers (50 per cent appeal, 50 per cent consideration) and lower amongst manufacturers (20 per cent appeal, 17 per cent consideration) – possibly due to the high cost of specialised machinery and equipment.
Turning to site selection, the survey found that access to road networks, key transport infrastructure and skilled employees had the highest level of perceived importance when selecting an industrial or logistics property.

GAC Australia launches logistics service, opens Perth warehouse

GAC Australia has opened a new consolidation warehouse in Perth, marking its first foray into the logistics business, in parallel to its shipping services available at all Australian ports since 2007.
The opening of the new warehouse comes in response to growing demand for storage space and distribution services from a major client with operations in Western Australia. The facility is located in the new Swan Brewery Estate at Canning Vale, about 20km away from Perth International Airport and Fremantle Port, with easy access to transportation links through the major road network.
The 800m² facility features a 5m x 5m warehouse door and an 8.5m truss height, allowing trailing equipment to reverse into the facility for loading and unloading. Arriving goods are consolidated and packed into pallets before being distributed to domestic and international locations.
“Australia has significant quantities of discovered gas resources,” said Scott Henderson, GAC Australia’s Managing Director. “In Western Australia alone, resource projects and infrastructure in the pipeline amount to billions of dollars. It is home to many local and international companies servicing the oil and gas, as well as mining equipment, technology and services (METS) sectors, presenting plenty of opportunities for project logistics and warehousing services providers.
“Having established a strong foothold in the country’s shipping sector, we are now ready to expand our portfolio to provide logistics services, and Western Australia is an ideal launch pad for our logistics operations. The ability to provide integrated shipping and logistics services will allow us to serve our customers better.”

CouriersPlease opens two new depots

Parcel delivery service CouriersPlease has opened two new relocated logistics facilities in major Australian cities, investment in its infrastructure ahead of a forecast growth in parcel deliveries in tandem with the growth in e-commerce.
The two new Perth and Melbourne locations will be key logistics facilities as the company expands its reach in Australia and overseas, as CouriersPlease explained in a media statement.
Located in the new $440 million logistics hub Drystone Industrial Estate, CouriersPlease’s relocated state-of-the-art logistics facility in Truganina, Victoria, replaces the company’s Port Melbourne, Victoria, depot. Along with CouriersPlease’s existing Mulgrave facility, it will provide the business with east-to-west coverage of Melbourne. The site is 29,000m2 in total, with 12,500m2 under the roof, and will accommodate over 160 courier vehicles. Additional bay spaces have also been allocated to accommodate future growth.
Drystone Industrial Estate is home to other distribution centres for major Australian companies, including Kmart, The Reject Shop and Rand.
The second recently opened logistics facility is located in Welshpool, an inner south-eastern suburb of Perth. The new 4,043m2 site will be the delivery hub for Perth and Western Australia. It comprises a 3,443m2 warehouse, with a 600m2 office space, and room to expand a further 2,000m2 in the future.
The logistics facility will provide improves access to the CBD and the north and south of the city and is close to main arterial routes such as Orrong Road, Welshpool Road, Leach Highway and Tonkin Highway.
In September last year, CouriersPlease opened a relocated Brisbane depot in Salisbury, and a new Adelaide depot is set to open in Marleston later this year.
“CouriersPlease has relocated our logistics facilities in major capital cities in order to accommodate the significant growth in the volume of parcels moving throughout our network,” Mark McGinley, CEO, CouriersPlease. “Our commitment in moving to the west of Melbourne has stemmed from it being a massive growth corridor with some of the highest rates of online shopping in the country. Our new Welshpool depot gives us greater coverage of the city and a larger warehouse space for logistics operations, allowing us to bring a better service to our customers. With room for future expansion, we hope to bring more jobs and opportunities to the local community.”

Shortage of large-scale logistics facilities in Melbourne

The industrial leasing market in Melbourne’s north has seen strong tenant demand continue to absorb supply of prime-grade stock, according to real estate group Colliers International, particularly in the food and beverage, logistics and specialised manufacturing industries.
“As leasing space and supply continues to tighten across the northern suburbs, we are also starting to experience a reduction in let-up time and incentives, with one of the key drivers being a shrinking serviced land allotment pipeline,” said Colliers International’s Marco Sandrin.
“With respect to current leasing vacancy for more than 10,000m2, we are currently experiencing the tightest market there has been for many years, with only eight buildings available, totalling just more than 100,000m2.”
Sandrin said two of the most significant transactions that had occurred this year were within the Melbourne Airport precinct.
“Growthpoint has leased 120 Link Road, a 26,517m2 facility to Wesfarmers’ Workwear Group, and 45-55 South Centre Road, a 14,082m2 facility to Direct Couriers, both on 10-year leases,” he said.
In Melbourne’s western suburbs, 50 per cent of leasing deals for more than 3,000m2 have taken place in the inner west, with the main catalyst being easy access to the CBD, Colliers International’s Stephen Ryan explained.
“We are also seeing a high demand for low site coverage cross-dock facilities that is resulting in higher square-metre rates across the buildings, along with quicker let-up times,” he said.
“With shrinking land supply and recent leasing take-up, we are expecting let-up times to continue to reduce and the incentives to compress.”
Ryan profiled a deal negotiated for delivery service BagTrans as an example. The company has signed a lease for 8,333m2 at GM Property Group’s business park at 600 Geelong Road, Brooklyn, from the start of October, following less than three months’ vacancy.
Colliers International recently released a custom publication showcasing large industrial facilities suited to transport and logistics, warehousing or distribution users across Melbourne, Big Sheds Victoria 2017.

Manhattan Associates wins logistics innovation award

Manhattan Associates’ Warehouse Management Solution (WMS) has won the Logistical Innovation award at the 2017 Australian Business Awards.
“This recognition reflects both our 27 years of focus and investment in supply-chain and omni-channel commerce innovation and how our solutions are enabling Australian organisations to respond to their customers’ rapidly changing needs,” said Raghav Sibal, Managing Director – Australia and New Zealand, Manhattan Associates.
“The expectations of today’s consumers are soaring and they want their goods delivered faster and more conveniently. With our WMS and complementary solutions, such as Distributed Order Management, retailers, manufacturing brands, wholesalers and distributors are equipping themselves with flexible fulfilment capabilities. By enabling them to work their whole network harder – leveraging inventory in transit, within stores, at suppliers, as well as in distribution centres – they can fulfil orders quicker and more profitably.”
Manhattan Associations supports Country Road Group, Casella Family Brands, eStore Logistics and Jeanswest, among others.
“Today, companies are facing a highly competitive and continuously changing business landscape,” said Tara Johnston, Program Director, Australian Business Awards. “In this context, the performance of companies depends more than ever on their flexibility, adaptability and responsiveness.
“New technological possibilities have the potential to transform the way companies operate within their respective industries with long-term gains in efficiency, productivity and customer loyalty. Each year, the ABA100 Winners are recognised for their commitment to business and product innovation and for their achievements in transforming business practices and end user experiences.”
The Australian Business Award for Logistical Innovation recognises products and services that provide innovative solutions for new and existing market needs in the fields of logistics and supply chain management.
 

L-R: DFE Founder, Sam Catania, DFE Managing Director, Joe Catania, and DFE National Operations Manager, Jason Elliot.

Direct Freight Express opens $36m depot in Keysborough, Victoria

Road carrier service, Direct Freight Express (DFE), has announced the opening of a new $36m facility in Keysborough, Victoria, to complement its direct linehaul operations.
The company has reported that the new site was necessary due to business growth and increased travel times and traffic across the greater Victorian metropolitan and regional areas.
DFE has said the depot is fitted with state-of-the-art tilt tray automated sortation systems that can sort up to 4,500 cartons per hour. The company has also reportedly invested in six-sided camera technology that detects side-by-side cartons.

Mirvac constructing new Sydney industrial facility

Property developer Mirvac Group has announced the commencement of construction on ‘Building 3’ at the Calibre industrial estate at Eastern Creek, Sydney, with the office and warehouse facility being delivered on a speculative basis.
The building will offer workspaces between 6,000 and 20,000m2 from December 2017.
The company noted that a key driver for the delivery of Building 3 has been the increasing growth of e-commerce or ‘eTailing’, a movement fuelling the uptake of industrial property in Australia.
“Industrial leasing activity to retail tenants within Western Sydney is tracking at approximately double the 10-year average since the beginning of 2016,” said Fabian Nager, Development Director – Office and Industrial, Mirvac. “As demand rises for online goods and services among the Australian population, e-commerce businesses are looking to secure strategically located, functional and flexible warehouses to improve operational efficiencies and future-proof their businesses.
“Building 3 has been designed for the evolving nature of the industry, with a focus on occupier amenity and enabling the use of current and future logistics technology. We have included a number of key future proofing initiatives, such as concrete floors that are capable of supporting nine tonne point loads, and a 20-metre cantilevered awning spanning the length of the building that will maximise all-weather functionality.”
Gavin Bishop, National Director – Industrial, Colliers, added, “Design considerations for modern industrial estates must include an increased use of robotic and mobile automation, greater cubic capacity and a quality indoor working environment.
“The current demand for fast-moving, online retailing is driving a new level of sophistication in industrial facilities that are in close proximity to key infrastructure, with market-leading technology, high levels of amenity and advanced operational specifications. The construction of Building 3 at Calibre responds to this trend and will offer a premium solution for a corporate headquarters and warehouse facility or a third-party logistics provider.”
 

Packaging company among top 10 for Australian CEO salaries

Ron Delia, CEO of Australian multinational packaging company Amcor, has the seventh highest salary in Australia, according to an annual survey of ASX100 CEOs carried out by the Australian Council of Superannuation Investors’ (ACSI). The survey reported that in 2016 he realised pay of $14,339,815, placing him ahead of Commonwealth Bank CEO, Ian Narev, though behind several healthcare, passenger transport, leisure and food company CEOs.
Peter and Steven Lowy, joint CEOs of shopping centre company Westfield Corp., topped the list, with a declared realised salary of $26,255,778.
In a statement, ASCI said, “We publish this survey to increase the level of transparency around CEO remuneration in Australia.
“We would like to include data about gender pay equality in our analysis. Sadly, however, the pool of female CEOs in the ASX200 in 2016 was too small to enable meaningful analysis of the data.”

Qube secures Target Australia for Moorebank Logistics Park

Qube Holdings has announced that it has reached an agreement to develop major new warehousing at Moorebank Logistics Park for Target Australia.
Through the agreement, Qube will develop 37,860m2 of warehouse and office facilities for an initial lease term of 10 years.
Due for completion in early 2019, the facilities will be among the first purpose-built operations within Moorebank Logistics Park, alongside the new, dedicated freight rail terminal.
Target Australia will be investing in the latest technology scanning and sortation systems at the facility, Qube explained in a statement. Target Australia also entered into a new five-year logistics services contract with Qube Logistics, covering freight from Port Botany to Moorebank.
“The Moorebank development is certainly a once in a lifetime opportunity,” said Maurice James, Managing Director, Qube Holdings. “Linking one of the nation’s busiest ports by rail to an inland facility with the sheer scale and location benefits of the Moorebank site is a game changer that will deliver huge long-term benefits to consumers and businesses.”
William Hara, Director of Qube’s Strategic Assets Division, added, “Securing Target Australia is testament to the quality product that is Moorebank Logistics Park, combining a superior property location and efficient logistics. Qube is looking forward to working with the Target Australia team in delivering an optimal warehouse and logistics solution for their operations.”

State-of-the-art TAS Toll Group facility gains approval

Toll Group’s application to develop a $20 million, state-of-the-art freight hub in Launceston, Tasmania, has received city council approval, The Examiner reports.
The application covers significant redevelopment of Toll’s current facility, with buildings to be extended and built, and the construction of a rail link.
Town Planner Claire Gregg spoke on behalf of Toll at the local council meeting, noting that the application represented a much-needed investment in the existing facility.
 

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