Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting cushmanwakefield.com to read:%0A%0A {0} %0A%0A {1}
Logistics & Industrial Australian Capital Markets 2024 Outlook Logistics & Industrial Australian Capital Markets 2024 Outlook

Insights

Logistics & Industrial Capital Markets 2024 Outlook

Access the report

Capital Market Outlook

Introduction

In 2023, approximately $5.1 billion in Logistics & Industrial (L&I) assets traded hands, maintaining levels consistent with pre-COVID averages. This level of resiliency was driven by offshore capital, primarily managed locally, subscribing to the sector’s growth outlook.

The Australian L&I sector continues to attract significant interest, with $45 billion in capital seeking investment opportunities. This interest is underpinned by the sector’s strong fundamentals, including a near-record low vacancy rate, limited uncommitted supply, and record levels of population growth supporting warehouse demand.

CAPITAL HAS RETURNED

As we head into 2024, capital that sat on the sidelines for much of 2023 has flagged their intention to re-enter the market, with the possibility of rate cuts in the second half of 2024 offering a substantial upside. A survey conducted by Cushman & Wakefield in late 2023 highlighted that nine in ten investors plan to invest in Australian L&I assets in 2024, the majority of which flagged to do so in the first half of the year. 

2024 Outlook Timeline


Logistics & Industrial Australian Capital Markets 2024 Outlook

 

2024 Outlook Key Takeaways


The Reserve Bank of Australia (RBA) is expected to pivot in H2 2024, with rate cuts likely as inflation moderates. The cash rate is widely viewed to be at its peak, and the anticipated rate cuts will provide relief to household balance sheets.
Economic growth is expected to slow to 1.2% in 2024. While the economy proved resilient in 2023, the 2024 outlook is contingent on consumer spending due to mounting cost of living pressures.

Population growth continues to underpin the economy and is expected to remain a key driver in 2024. The Federal Government’s Migration Strategy, released in late 2023, announced shifts in the migration system from students towards workers. Despite this, population growth in 2024 is forecast to total 1.8%, continuing to support warehouse demand.

Consumers have shifted towards non-discretionary retail items, leading to the outperformance of food retail. This trend is expected to continue in 2024, generating strong demand for cold storage warehouse space, as approximately 40% of goods stocked at supermarkets require cold storage provisions.

Australia remains an attractive and transparent market for global capital, particularly from Asia. Favorable tailwinds within the L&I sector and a weaker Australian dollar make Australia an appealing entry point for offshore groups.

With interest rates likely to remain flat over the first half of 2024 and cuts expected thereafter, the current yield expansion cycle has run its course. Greater clarity on the outlook for pricing will trigger a pick-up in transactional activity as capital returns in scale.

Rental growth in 2024 is forecast to ease from the 20%+ levels recorded over the past years, yet it is expected to outpace historical benchmarks. Infill locations are projected to outperform. At a national level, rents are forecast to grow by ~6.0% in 2024, while select infill markets are forecast to record growth closer to 8.5% - 10.0%.

In 2023, pricing premiums for scale were not evident. However, as capital re-enters the market in 2024, premiums for portfolio opportunities are expected to re-emerge. New offshore capital sources looking to enter the Australian market have flagged their intention to build scale quickly and both on-market and off-market portfolio opportunities will be highly pursued in 2024. 

Contacts

Tony Iuliano
Tony Iuliano

International Director - Head of Industrial & Logistics, ANZ
Sydney, Australia


Download VCard

Luke-Etherington
Luke Crawford

Head of Logistics & Industrial Research
Australia


Download VCard

David-Hall
David Hall

National Director, Head of Logistics & Industrial – Brokerage, ANZ
Sydney, Australia


Download VCard

Trevor Maitland
Trevor Maitland

National Senior Director, Capital Advisory, ANZ
Melbourne, Australia


Download VCard

Benjamin-Ryan
Benjamin Ryan

Associate - Capital Advisory
Melbourne, Australia


Download VCard

Matt Clifford
Matt Clifford

Head of Sustainability & ESG, APAC
Sydney, Australia


Download VCard

Caitlyne Halabi
Caitlyne Halabi

Logistics & Industrial Research Analyst
Sydney, Australia


Download VCard

Vivian Nguyen
Vivian Nguyen

Marketing & Strategy Manager, National Capital Markets, Logistics & Industrial
Melbourne, Australia


Download VCard

Discover the future of Alternatives in Australia

Contact our Team now!
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.
MORE OPTIONS
AGREE AND CLOSE
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All
SAVE SETTINGS