Australian Logistics & Industrial Capital Markets Outlook 2025

CUSHMAN & WAKEFIELD | 5

04 PRICING PREMIUMS FOR PORTFOLIOS EXPECTED TO RE-EMERGE Pricing premiums for scale have not been evident over the past two years; however, there is potential for this trend to re-emerge in 2025 given the difficulty in building scale quickly - There have been just 12 trades above $500 million nationally in the L&I sector. The return of this trend will drive further recapitalisation and portfolio activity.

05 INVESTOR MANDATES

06 YIELD COMPRESSION CYCLE TO BEGIN There is the potential for between 10 to 25 basis points of yield compression for the sector in late 2025, before a further 25 to 30 basis point reduction in 2026. For higher barrier to entry markets such as Sydney, yield compression could be brought forward as investors price in further rate cuts in 2025.

EXPECTED TO SHIFT BACK TO CORE Capital appetite for core opportunities started to shift in Q4 2024 and greater liquidity is expected in 2025. The market has reached an inflection point as yields have been reset higher with groups seeking counter-cyclical opportunities with a greater focus on income security. The forecast reduction in debt costs will also be a catalyst behind greater appetite for core assets.