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E-commerce boom underpins industrial property demand

In a recent deal, the unlisted Charter Hall Prime Industrial Fund (CPIF) secured Marley Spoon, a market leading online grocery retailer, to a 10 year pre-lease at a new facility in Wetherill Park, Sydney.

Marley Spoon’s pre-lease is for a 14,200 square metre purpose-built, temperature-controlled logistics facility in a strategic location in Sydney’s west. The deal with Marley Spoon was brokered by Raj Chaudhary, associate director at CBRE.

Andrew Simons, Charter Hall’s head of development, industrial & logistics, said Charter Hall is committed to supporting the growth in online grocery retailing and increasing the group’s substantial portfolio in the food logistics sector.

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Relocating and expanding from its existing premises in Strathfield, the new facility has been designed to accommodate the significant growth of Marley Spoon and Dinnerly to provide a more efficient supply chain for product to Australian customers.

Dexus has entered into agreements to sell a high quality portfolio of industrial assets to the Dexus Australia Logistics Trust. The portfolio comprised five high quality industrial assets in Truganina, Victoria, and an industrial business park in Botany.

Colliers International industrial and logistics latest market update found there has been a rapid shift to online retail sales, with a growth of 31.9 per cent in the year to June 2020, up from 13.6 per cent in January.

By proportion, online retail accounted for 9.7 per cent of total retail sales in June compared to 6.2 per cent a year ago.

Given the current climate, Colliers has seen a rise in enquiry in other markets such as western Sydney from warehousing and logistics groups seeking short-term solutions as these occupiers look to gain surety in their eastern seaboard supply chains.

The agency is tracking more than 1.1 million sq m of occupier requirements above 3500 sq m size assets across western Sydney alone, 33 per cent of which are in the third party logistics sector.

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In another deal, Livingstone International, a large distributor of healthcare and pharmaceutical products previously based in south Sydney, recently leased a brand-new 12,000 sq m facility in Prestons South West Sydney to improve their national distribution network and gain efficiencies in their logistics operations.

David Hall, national director, Industrial at Colliers International, says the rapid increase in e-commerce and online ordering is causing occupiers to look at additional leasing space in specific locations.

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