Australia, Companies, Features, Industrial Property, Logistics

Capitalising on industrial capital markets

In the past 24 months, Colliers has notably engaged in transactions involving over 80 per cent of the multi-storey industrial sites that have emerged on the market.

Colliers’ Sean Thomson, and Daniel Telling, dive deep into the innovative and adaptive strategies driving their Industrial Capital Markets services, detailing how the company seamlessly marries national scope with acute local insight.

In the bustling world of Industrial capital Markets in Australia, the name Colliers has become synonymous with innovative solutions and strategic foresight. Colliers’ Sean Thomson, National Director Industrial Capital Markets Australia, and Daniel Telling, Manager Industrial Capital Markets Victoria, see the company as a market leader, particularly in evolving domains like multi-storey logistics in Australia.

“There’s a unique DNA within Colliers that distinguishes our approach in the market,” Sean says, emphasising the particular blend of “national and international reach with insightful local market intelligence.” Notably, the company, while embracing a global perspective, doesn’t lose sight of the nuances and specifics of the local markets, thereby ensuring a precise and tailored strategy in their transactions and divestments of large-scale industrial real estate nationwide.

“Our approach is all-encompassing,” says Sean. “When clients appoint our Capital Markets team, they’re not simply engaging in a single service offering. They are essentially tapping into the collective expertise of the entire Colliers business – from Capital Markets specialists to leasing agents, research, debt advisory, and beyond.” 

This extensive collaborative approach ensures that the services provided are not pigeonholed into divestment alone, but weave through a myriad of domains, reflecting a truly holistic business strategy.

In Sydney’s multi-storey logistics space, this approach has been pivotal, demonstrating an evolution in the industrial market towards innovative developments. In the past 24 months, Colliers has notably engaged in transactions involving over 80 per cent of the multi-storey industrial sites that have emerged on the market.

Sean highlights a landmark transaction: “We recently managed the sale of the first stabilised multi-storey logistics asset within Australia, which was transacted for $137.2 million on behalf of Hale Capital Partners and LaSalle.” Such transactions not only underpin the company’s active role in shaping market trends but also underscore their pivotal role in navigating these intricate transactions.

Sean Thomson, National Director Industrial Capital Markets, Colliers.
Sean Thomson, National Director Industrial Capital Markets, Colliers.

Daniel brings to the fore a robust facet of Colliers’ Industrial Capital Markets operations: focusing on large-scale transactions on behalf of its valued clients, many of which are transformational in nature. 

“We interface consistently with a diverse spectrum of the most active institutional, corporate, and private investors within the Australian industrial market,” Daniel states, further explaining how this constant interaction allows Colliers to adapt and manage a variety of client needs, including the complexities of both divestments, acquisitions, and relocations. A striking instance he cites involves one of the world’s largest heavy vehicle manufacturers, where Colliers managed a large-scale divestment worth approximately $96 million in Dandenong South and subsequently orchestrated a significant relocation through their local leasing team, showcasing their full-spectrum service capability.

“Colliers represents a collaboration between data and experience,” Sean adds, speaking of their client-centric approach. This isn’t merely a vendor agency relationship; it’s a partnership journey, where the Colliers team provides trusted advice to help clients make informed decisions. The partnership extends to a wide-ranging clientele that includes heavy-hitters like Centuria, Charter Hall, Dexus, GPT, Cadence, and many more, each representing varied and nuanced needs within the industry.

With a steady eye on ensuring clarity amidst complexity, Daniel highlights, “We harness Collier’s owned data in conjunction with platforms like SA1 and Tableau, not merely as data representation tools but as mechanisms to present intricate data in a simplified, interactive, and client-friendly manner.” 

This data-driven approach complements the company’s client-partnership orientation, thereby amalgamating statistical insight with personal client relations to offer nuanced and strategic solutions.

Within the vast and complex universe of Industrial Capital Markets, Sean and Daniel illuminate a pathway where Colliers not only navigates the intricacies with adept skill and strategic foresight but also with an unwavering commitment to client success. 

These are not just transactions; they’re about collaborating to achieve the best outcomes for clients. The leadership’s reflection highlights a dexterous capacity to intertwine data-driven methods, client-partnership approaches, and market-leading capital markets operations. Indeed, Colliers demonstrates through practical examples how they’ve not only responded to market shifts but have actively propelled those shifts, engineering favourable outcomes for their wide-ranging clientele.

The Australian industrial capital market space is not without its shifts and challenges, and with the nuance and expertise that Sean Thomson, Daniel Telling and the wider Capital Markets team bring to the table, Colliers is not merely adapting but also guiding some of these transformations. 

Daniel elaborates on some of the contemporary dynamics at play. 

“Corporate sale and leaseback activity has notably risen in recent years,” he says. “Population growth and significant e-commerce growth in Australia has spurred investors to target key infill last-mile logistics locations in close proximity to densely populated residential catchment areas, positioning themselves for strong rental and capital value growth.” This development has paved the way for major corporates to capitalise on the robustness of the industrial capital markets, primarily by divesting non-core real estate assets and liberating capital for reinvestment within their business operations.

“Many groups possess substantial real estate assets which often don’t yield them the adequate returns they seek,” Sean adds. “The divestment of this real estate to liberate capital, which is then reinvested back within their core business operations, has become a viable strategy for many.” Thus, the trend of liberating capital by divesting non-core assets is not merely a reactive strategy but an active approach to leverage the buoyancy of the industrial capital markets in Australia.

However, the pathway is not without hurdles. As Sean highlights: “A prominent challenge within the capital markets at present is that many purchasers face capital constraints and liquidity issues, coupled with some volatility within the debt market.” 

Colliers has proven adept at navigating through these challenges by providing a suite of services that will enable them to guide clients through these dynamic markets.

Daniel adds to this, focusing on the elevated costs of capital and construction as a pivotal challenge: “Utilising data to simplify complex investment and development scenarios in this dynamic capital markets environment is paramount.” Thus, data has not merely emerged as a tool for operational decision-making but also as a mechanism to demystify and manage complexities.

Looking forward, Colliers not only acknowledges the evolving marketplace but also places themselves as pioneers in driving change. “We’re at the forefront of the changing market, being first movers, which has assisted our major

Daniel Telling, Manager Industrial Capital Markets, Colliers.
Daniel Telling, Manager Industrial Capital Markets, Colliers.

clients during these volatile times,” says Sean, also noting a distinct focus on “data centre transactions driven by the growth of AI and multi-story logistics developments,” which have seen a significant uptick citywide, having begun their trajectory in South Sydney.

This forward-looking approach anticipates not only the continuation but also the strengthening of capital flows into the industrial sector. Daniel adds, “We foresee that strong capital flows will continue into the Industrial Capital Markets, securing it as a safe-haven asset class.” He emphasises the pivotal role of innovation and technology leadership to support new entrants into the market, ensuring their stability and strategic growth within the industrial sector.

In an environment waiting to stabilise post-pandemic, Sean projects, “Once we see true stabilisation, major super funds, being the most well-capitalised groups within the Australian market, will incline towards the industrial asset class.” The underpinning logic here resides in the sector’s demonstrated “growth in rents, tight supply, and strong fundamentals.”

Sean Thomson and Daniel Telling’s approach illustrates the power of Colliers expertise in the Australian Industrial Capital Markets. Navigating through emerging trends, confronting, and mitigating challenges, and anticipating future developments, Colliers is bolstering its position not merely as a participant but as a transformative entity within the space. They navigate, with adept precision, the dual role of responding to market shifts and catalysing those shifts, ensuring their clientele is not merely keeping pace with the market but is also positioned for strategic growth. 

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