Logistics & Industrial Capital Markets 2024 Outlook Report

What assets were in demand, and will this change in 2024?

Short WALE assets were aggressively chased – a trend that will continue Given the outperformance of rental growth, the majority of active capital in 2023 was focused on short WALE assets in infill markets. As a result, 61% of investment volumes for the year stemmed from infill market assets and compares to 2020 at just 39% of investment volumes.

With rent growth in infill markets forecast to outperform given more modest levels of supply, this trend is forecast to remain in 2024. Long WALE assets recorded limited buyer participation, particularly if access to market rental growth was unavailable through market rent reviews. As a result, the average WALE of assets to trade has halved since 2019, sitting at 4.79 years nationally in 2023, with both Sydney and Melbourne sitting under this average.

Figure 24. National Infill vs Non-Infill Transactions (by Volume)

2024

2023

2022

2021

2020

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Infill

Non-Infill

Source: Cushman & Wakefield

Figure 25. Average WALE by City, 2019 vs 2023

SA

WA

QLD

VIC

NSW

National

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Years

2019

2023

Source: Cushman & Wakefield

CAPITAL MARKETS 2024 OUTLOOK | 28