Moving into a new facility is one of the biggest decisions a business can make. Get the internal design right, and the warehouse becomes an asset that compounds in value across the life of the lease. Get it wrong, and the compromises made become daily friction points. Peter Jones, Managing Director at Prological, explains why getting the design order right sets manufacturers up for years.
Manufacturers are dealing with significant cost pressures. According to Prological’s 2026 Pulse Check Report – which surveyed over 200 supply chain and logistics professionals across Australia and New Zealand – 68 per cent of respondents cite rising costs as the top challenge. Manufacturing shows particular sensitivity to that pressure, with operational constraints limiting the capital available for investments that would enable future growth. Rising minimum wages, electricity costs and transport impacts from the Middle East conflict can push businesses to halt transformation projects, or scale them back.
Under that pressure, the temptation is to narrow focus to floor space and throughput and prioritise having enough room to keep the line running smoothly, without analysing the entire operation.
“Manufacturers can underestimate the scope of what a facility project involves,” says Peter Jones, Managing Director at Prological. “It goes well beyond racking and layout – it touches building design, fire compliance, freight logistics, light, safety, people, internal and external traffic management, inventory systems and the coordination of a live transition, all running in parallel and on a tight timeline.”
The window is open
Australia’s industrial property market has cooled considerably from its post-COVID peak, with JLL’s Q1 2026 data showing vacancy rates broadly stable across the eastern seaboard – Sydney at 5.8 per cent, Melbourne at 5.2 per cent, and Brisbane at 5.3 per cent. Prological’s own research shows the proportion of businesses citing lack of available industrial property as a top challenge has fallen from 12 per cent in 2024 to just 6 per cent in 2026.
Peter describes it as a meaningful change from the conditions that defined the past few years. “Historically, the industrial property world has operated on a ‘build it and they will come’ model. Now vacancy rates have backed off from historic lows, and occupiers have time to be deliberate about their decisions.”
However, Peter warns manufacturers on waiting too long to make a call. “This window won’t stay open indefinitely, and the supply pipeline is already thinning especially in Melbourne and Brisbane, while Sydney continues to escalate in rental values.”
The spec-built trap
When manufacturers do move, many assume that operations can be adapted to fit the building, and default to a spec-built facility, available immediately with lower upfront commitment. It is an understandable choice, particularly for businesses under cost pressure. But Peter argues it is one that frequently costs more in the long run than the short-term savings might suggest.
“There will always be some level of the market requiring a standard warehouse,” he says. “But for manufacturers with complex product profiles, or businesses that are investing seriously in automation and integrated systems, a spec-built facility is often a compromise from day one.”
For example, generic spec builds frequently fall short on slab capability, particularly around point loads, which can rule out optimal racking configurations that would otherwise have been available to the occupier.
Design the inside first
According to Peter, the internal operation must be understood before the external building design is finalised, which can be at odds to how businesses and the traditional industrial real estate sector approach property decisions.
Peter says “slab load ratings, dock placement, building orientation, fire system design and layout – all of these need to be specified around the operation, not the other way around. “You cannot retrofit the inside to fit the outside,” Peter says. “When organisations are making significant investments in automation, integrated systems and operational workflows, it makes sense to have a facility designed around those requirements. Adapting the operation to fit an existing building is working backwards.”
A proper internal design process – comprehensive sizing, space requirements modelling, racking and layout configuration, materials handling procurement, freight logistics – yes, this all takes time, but it pays back in multiples across the full operational life of the facility.
The cost of the wrong call
The consequences of getting the design order wrong are not always immediately visible. Peter’s seen situations where a layout orientation that seemed workable at handover ends up causing issues as volume and velocity increase. A slab specification that seemed like a reasonable compromise at sign-off can become a constraint on racking options for the next ten years, or a fire system designed around an assumed internal layout then requiring expensive modification once the real layout is determined, or again, a more compromised layout has to be signed off.
Peter points to fire suppression systems as a common example of where the consequences play out from early design mistakes. The in-floor plumbing is inside the slab, and if the internal layout hasn’t been finalised before that stage, the water pipes for the fire system end up configured around an assumed layout rather than the optimal one – an expensive problem to fix, or live with after the fact. Building orientation is another. “It’s not uncommon for a business to spend months debating orientation. Without question, different orientations offer different benefits, and constraints”. Peter goes on to say, “there are no perfect solutions, just a best set of compromises. Our role is to get businesses strategically thinking in the right direction early enough. Allowing time for the difficult issues to be resolved – once the concrete is poured, your options narrow considerably.”
He says manufacturers wanting to pull away from the crowd need to be thinking about these decisions long before the move. “The companies pulling ahead aren’t necessarily the largest or best-resourced. They’re the ones asking the right questions early about what their operation needs, how it will need to grow, and what infrastructure will support that,” Peter continues. “Businesses which skip that step end up paying for it later on. Our advice is to engage assistance early in your next building execution project.”
Thinking about your next move? Prological helps manufacturers get the design right before the building is locked in. Get in touch with our team to talk through your next facility project at www.prologicalconsulting.com.
