Australian Logistics & Industrial Capital Markets Outlook 2025

CUSHMAN & WAKEFIELD | 45

KEY THEMES THAT UNDERPIN THIS OUTLOOK INCLUDE: Pricing has been reset: The

repricing cycle has run its course and presents the opportunity for investors to buy in at a discounted yield for stronger future returns once interest rates are cut. Values have already turned the corner, led by continued rental growth. Yield compression cycle to commence: A 100 basis point reduction in the cash rate over the next two years (C&W Research House View), in combination with the real bond rate falling to approximately 1.5% by the end of 2026, is expected to drive approximately 60 basis points of L&I yield compression over the next two years. Capital to become more active: A significant volume of dry powder is waiting to be deployed, with logistics remaining a high conviction investment sector. Capital that has sat on the sidelines over the past years has returned to the table and is participating again, supporting yield compression as demand is expected to outstrip availability. Timing: Higher entry yields, potential for falling interest rates, strong fundamentals and a diminished supply pipeline all point towards a period of recovery and elevated returns.