The future of the Australian industrial property sector

Thought Leadership

The future of the Australian industrial property sector

Tailwinds from population growth and e-commerce penetration will continue to drive demand for industrial space.

12 September, 2023

What does the future of the Australian Industrial Property Sector look like? Aliro Group Managing Director and CEO, Daniel Wise, shares his expert perspective of the Australian industrial property sector, exploring key investor considerations.

“The underlying fundamentals for the sector remain strong, with national vacancy at an all-time low, in fact, the lowest globally. We expect tailwinds from population growth and e-commerce penetration to continue to drive demand for industrial space.”

Views on the Australian Industrial Property Sector in a high inflation and interest rate environment
Consistent with the global experience, Australia has seen a rise in construction costs in this inflationary environment. As cap rates continue to adjust in line with interest and bond rate movements, higher economic rents are required to bring new product online to meet the high tenant demand. Given these factors, we expect to see sustained rental growth over the coming 12 to 24 months.

Considerations when assessing industrial opportunities
At Aliro, we strongly believe in providing access to value to our tenant and investor customers. As we assess opportunities in the current environment, we adopt a disciplined and first principles approach to real estate acquisitions and continue to focus on high-quality, well-located assets with strong tenant covenant strength.

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