Australia’s online retail sector is surging, with e-commerce sales now accounting for a record 14.3 per cent of total retail sales – a figure forecast to reach 17 per cent by 2029, according to new CBRE research.
In its latest E-commerce and its Impact on Logistics Real Estate report, CBRE predicts that an additional 1.7 to 1.8 million square metres of dedicated e-commerce logistics space will be required over the next five years to support the growing shift in consumer behaviour.
However, this rising demand is set against a backdrop of constrained supply. CBRE warns that the projected pipeline of new logistics developments between 2025 and 2027 will fall short of the space needed to serve not only e-commerce, but also the food and beverage sector and broader population growth.
CBRE’s Head of Industrial & Logistics, Data Centre Research Australia, Sass Jalili, said the tight supply will likely continue to drive up rents.
“With logistics demand expected to outpace supply, we estimate national net effective rents will rise by 4.1 per cent annually over the next four years,” she said.
“E-commerce operators typically require three times more warehouse space than traditional retailers. For every $1 billion in online sales, an extra 70,000 square metres of logistics space is needed. That equates to a further 1.7 to 1.8 million square metres by 2030 – a figure that exceeds what’s currently in the pipeline.”
Jalili attributed the continued growth of online shopping to a broader base of tech-savvy consumers, enhanced digital payments, and more efficient delivery networks.
Australia’s total retail market reached $440 billion in 2024, with retail occupiers accounting for roughly 20 per cent of all logistics leasing activity that year.
Matthew Kandelaars, Property Council Group Executive Policy and Advocacy, said industrial and logistics real estate is critical infrastructure for the country’s economic performance.
“The lack of supply in the industrial and logistics sector can have serious negative flow-on effects on our economy and supply chain efficiency,” Kandelaars said. “To support our growing economy and continued rise of online shopping, we simply need more industrial space.”
Australia has seen logistics availability tighten significantly since the pandemic, with vacancy rates remaining below 3 per cent across most markets from 2021 through to 2025 to date.
CBRE estimates that annual structural demand will average 2.1 million square metres between 2025 and 2027 – well above the expected average annual supply of 1.9 million square metres.
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