Australian Logistics & Industrial Capital Markets Outlook 2025

CUSHMAN & WAKEFIELD | 57

The stabilisation of book value cap rates will also support greater capital appetite for core, as vendors have been largely unwilling to trade at discounts to book value. This gap has now been bridged and vendors going forward will be able to meet the market more appropriately. Unlike 2020 to early 2022 where value was created through record levels of yield compression, value growth in the next cycle is expected to be more balanced between income returns, as yields are higher, and income growth, while yield compression is expected to be less pronounced than the previous cycle as debt costs will not reach the same low point. As a result, greater attention is expected to be paid to property fundamentals, income security and cash flow. Proactive capital will reap the benefits in the first half of the year before competition intensifies in the second half of 2025.

FOR CORE STRATEGIES, THE NARRATIVE IS CHANGING, AND GREATER CAPITAL APPETITE IS EXPECTED IN 2025