Australia's industrial property sector is being propelled into a new era of growth and innovation as business’ rapid transition to green initiatives underpins the continued strength of the sector - with a new report released today by leading agency Savills Australia revealing a mammoth $33.3 billion investment in warehousing in the last five years.
The new Spotlight report, titled ‘Is Manufacturing Making a Comeback?’ examines how increased adoption of renewable energy, advanced manufacturing, and electric vehicle (EV) technologies is directly bolstering demand for industrial space across Australia, with manufacturing investments providing substantial downstream benefits.
According to Savills, there is already evidence of increased commercial activity in Australia coinciding with a substantial surge in the value of private sector factories and other secondary industry jobs - totalling c.AU$8.2 billion since 2019. A further AU$33.3 billion was invested in warehouse properties over the same period - indicating significant flow-on-demand benefits for transport, storage and logistics space.
The Government has made a significant commitment to reduce carbon emissions by 2030, with a broader aim of achieving net-zero by 2050. This largely hinges on the rapid electrification of various sectors and more equipment, and technologies will be needed, the most crucial being renewables, EV batteries and ESS. Although there are challenges in reaching net-zero goals, it also presents opportunities for industrial property, which forms the backbone of the industries needed to make this transition.
“While industrial demand has historically been driven by warehousing and logistics, manufacturing is poised to see a greater focus going forward. With a strong policy framework and increasing investor interest, this rebound is poised to reshape Australia’s industrial property market for years to come,” said Katy Dean, Head of Research at Savills Australia.