Colliers Industrial Capital Markets Review found that Australian industrial and logistics assets remain well sought after, with $5.49 billion trading in 2020 – up 11.5 per cent from the level recorded in 2019.
The industrial sector has been brought to the forefront in 2020 and has outperformed all other mainstream real estate asset classes.
The strong level of investment has come off the back of robust fundamentals within the sector including e-commerce growth, food logistics and infrastructure investment.
This asset class accounted for 28.5 per cent of investment volumes in 2020 (across office, retail and industrial), well above the 15.4 per cent recorded in 2019.
“The strong level of investment recorded for the year has come off the back of robust fundamentals within the sector including e-commerce growth, food logistics and infrastructure investment, as well as a deeper pool of capital as new entrants to the market emerge,” said Gavin Bishop, Head of Industrial Capital Markets at Colliers International.
Gavin credits changing consumer preferences towards online grocery and food platforms in 2020 that has resulted in strong occupancy demand from occupiers in the food subsector.
“These businesses have continued to perform well, with expenditure on food items rising by 11 per cent since panic induced buying in March 2020, well above the 2.8 per cent recorded for the corresponding period in 2019,” he said.
The East Coast states captured 91.6 per cent of investment volumes in 2020 as institutional groups look to capitalise on strong leasing fundamentals and favourable outlook for further yield compression in these states.
“The vendor profile has been under pinned by corporate groups, the bulk of which have been sold via a sale and lease back arrangement. Nearly 60 per cent of assets traded stemmed from corporates, while circa 20 per cent came from institutional vendors including Charter Hall and GPT.”