The boom in e-commerce has led to the industrial property strongest growth rates than ever before. Since the start of COVID-19, many businesses have shifted to online to survive. Thus, there has been an upsurge in demand for industrial spaces for storage, warehouses and distribution centres.

Online shopping has been on the growth for the past 2 years since everyone started social distancing. Accordingly, supermarkets and retails have moved their focus to e-commerce due to the trebled demand. This has significantly reduced the vacancy rate in industrial property. On average, supply rate in Sydney is 1.8 percen, 3.4 percent and 2.6 percent in central west and southern area, respectively, according to CBRE industrial vacancy report.

The industrial property strong growth rates applies in Melbourne central with vacancy rates being 3 percent, 2.6 percent in the west and 4.3 percent in the North.

Big brands such as Amazon, JB Hi-Fi and other fashion brands have announced their plans to build up more large scale fulfilment centres in Sydney and Melbourne.

Director Research & consultancy of Knight Frank, Katy Dean said the rise in online shopping fufilment has continued to increase the leasing volumes to 700,000 sqm, which accounts for 60 percent of 2019’s figures.

Research from Knight Frank indicates there was an nearly 10% growth in the total industrial leasing volumes in comparison to 2019 for Melbourne. As a result, this opened avenues for tremendous investment into the sector due to the re-weighting to logistics and warehouse.

Ms Dean also mentioned the struggle of developers to keep up with the upward trend in logistics and e-commerce occupiers over a short periods. She said that the long-term prospect of the sector is foreseeable as there are a good number of new industrial development projects announced in Sydney and Melbourne.

Source: The Sydney Morning Herald.