Logistics & Industrial Capital Markets 2024 Outlook Report

With real estate still accounting for around 40% of greenhouse gas emissions, L&I ESG trends relate to a wider drive to achieve rapid decarbonisation across the entire economy. We still have a long way to go, with more complex changes still ahead. In 2024 ESG will remain a hot topic for L&I, What are the top ESG trends that will shape L&I in 2024?

Increasingly, EVs are not just private cars, but also work vehicles, forklifts, and light duty trucking, with many fleet operators already piloting heavy-duty EV vehicles or alternative fuels such as hydrogen. In 2024, landlords must clarify the role they will play around owning, installing and maintaining EV systems, or supporting tenants in doing so, and how this gets reflected in leases, rents, and valuations. Staying focused on “E” Most ESG strategies focus mainly on “E” – Environment. Reducing energy and water consumption, waste generation, and improving recycling are simple and impactful ways to make real estate portfolios more sustainable. ESG continues to evolve, but it will remain important to focus on the simple, achievable things to improve environmental impact. Defining and Delivering “S” The “S” in ESG stands for Social, but most people struggle with a simple definition, and often initiatives can look different by asset class - what works in offices may not work in warehouses. In 2024, we are expecting to see social programs become better defined, and their rollout will be accelerated. This may include “Buy Local” mandates to support small businesses or a commitment to use indigenous businesses where possible. It may include championing topics around LGBTQI or disability support.

even amongst challenging economic conditions. In fact, these trends can assist in maximising returns, attracting quality tenants, and positioning L&I as a buoyant and attractive asset class. Here’s how being green can help avoid you seeing red. Powering Up Decarbonization Electrification – getting rid of fossil fuels such as natural gas – and adoption of battery storage are on the rise across new developments and existing assets. Rooftop solar and offsite power purchase agreements remain the most popular choices for renewable energy in the property sector, amidst wider change towards net-zero power for the entire economy. As solar prices continue to fall, tenants demand net-zero power, and low- or no-capex models become more popular, there has never been a better time for solar. Solutioning for Electric Mobility Electric vehicle (EV) sales continue to surge in Australia, up 161% in 2023. Whilst petrol and diesel vehicles still dominate market share, the EV market will continue growing strongly, placing pressure on landlords around parking, EV charging infrastructure, power supply and costs.

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