Artificial intelligence and warehouse automation are beginning to reshape the requirements for industrial property across Australia, according to new research examining trends in the logistics and real estate sectors.
Data released in the December 2025 MSCI property results shows industrial real estate continuing to outperform other commercial asset classes. The sector delivered total returns of 8.6 per cent, supported by capital growth of 4.1 per cent, the strongest capital appreciation among major property sectors.
Industrial assets were also the most actively traded commercial property class in Australia in 2025, with $29.58 billion in transactions across the year. This represented an increase of 44.9 per cent compared with 2024 and accounted for 36.8 per cent of all national commercial property activity.
However, analysts suggest the underlying drivers of demand are evolving as automation technologies and artificial intelligence become more widely adopted in logistics and warehouse operations.
Systems such as automated storage and retrieval systems, autonomous mobile robots and AI-driven inventory management platforms are increasingly being integrated into distribution centres globally. In the United States, the warehouse automation market is projected to grow from approximately US$25 billion in 2024 to more than US$54 billion by 2029.
Australia faces similar pressures to modernise logistics infrastructure. According to Australian Bureau of Statistics data, the transport, postal and warehousing sector recorded business growth of 5.1 per cent in the year to June 2025, one of the fastest-growing industries nationally.
At the same time, the availability of developable industrial land in key logistics markets remains limited. The New South Wales Government’s Employment Lands Development Monitor, released in December 2025, identified 20,210 hectares of zoned employment land across Greater Sydney, but only 631 hectares of undeveloped land with water and sewer infrastructure currently in place.
As logistics operations adopt greater levels of automation, building specifications are also changing. Highly automated warehouses typically require increased electrical capacity, high-bandwidth data connectivity, enhanced environmental controls and redundant power systems to support robotics and automated handling equipment.
This shift is contributing to a growing divide between newer, technology-ready facilities and older industrial buildings that may struggle to accommodate the infrastructure requirements of modern logistics operations.
