Logistics & Industrial Occupier Market Outlook 2024

Sectors Driving Warehouse Demand

What's the outlook for these categories? Essential Spending Essential Spending is anticipated to grow at a steady pace, underpinned by population and wage growth. Every new resident creates additional demand for everyday essential items, including food and other fast-moving consumer goods (FMCG), including toiletries and household products. While the impacts of population growth are not felt immediately, the flow on to warehouse demand will occur when occupiers continue to expand and outgrow their current facility. Over the next two years, we anticipate occupiers in this category will account for 25%-35% of leasing demand, equating to space requirements in the order of 850,000–1,200,000 sqm per annum . Transport and logistics contracts tied to supermarkets and FMCG retailers are anticipated to account for the bulk of this demand, some of which will include cold storage warehouse space.

The take-up of warehouse space in recent years has been dominated by the transport and logistics, retail trade and manufacturing sectors, collectively representing 83% of leasing demand since the beginning of 2020. However, at its core, demand for warehouse space is imbedded in consumer needs .

To understand this and to unpack the outlook for demand, we have broken down warehouse demand into the following three categories: essential spending, cyclical spending and structural trends. Overlapping with each of the three main categories is the transport and logistics sector, which touches on each category at some point in the supply chain.

Figure 5. 2024-2025 Demand Outlook by Industry Sector

&

T

L

R

O

O

G

P

I

S

S

T

N

I

A

C

HOUSEHOLD

CONSTRUCTION

R

S

GOODS

T

Figure 6. Australian Retail Sales Historical Trends

DISCRETIONARY APPAREL

Category

3 months

12 months

25 years (p.a.)

HEALTH &

Supermarkets

2.1%

4.0%

5.1%

ELECTRONICS

Liquor

-0.6%

0.7%

7.5%

PHARMACEUTICAL

Other specialised food

5.5%

1.5%

2.9%

L N

A

G

C

AUTOMOTIVE

I

I

L E

D

Pharmacy & cosmetics

6.7%

7.4%

6.8%

C P

N

Y

C

Household goods

-3.4%

-4.6%

4.7%

L

S

A

MANUFACTURING

S

R

D

Electronics

-3.8%

-4.6%

4.1%

U

R E N

U C T

ESSENTIAL CLOTHING

Hardware & gardening

0.9%

0.0%

6.0%

E

T

S

R

S

S

T

P

E

Clothing

0.1%

1.0%

5.1%

S

E

N

N

T

I

D

A

Footwear & accessories

0.3%

-0.5%

4.3%

L

I

N

G

Department stores & DDS

-0.2%

1.1%

2.5%

FOOD & BEVERAGE

E-COMMERCE

Recreational goods

0.6%

-3.2%

3.5%

Takeaway food

3.3%

5.6%

5.3%

Cafes & restaurants

1.6%

5.4%

6.9%

FMCG

T

R

Total retail

1.4%

2.0%

5.0%

S

A

C

I

N

Online food retailing

15.3%

12.0%

24.0%

T

S

S

I

P

PACKAGING

G

O

Online non-food retailing

2.2%

1.1%

21.0%

O

R

L

T

&

Online total

6.1%

4.2%

21.8%

Source: Cushman & Wakefield

Source: ABS (April 2024), Cushman & Wakefield

11 | CUSHMAN & WAKEFIELD | LOGISTICS & INDUSTRIAL

OCCUPIER MARKET 2024 OUTLOOK | 12