Is Retail Disruption Feeding An Industrial Surge?


IN THEIR LAST article, BMT Tax Depreciation took a look at the attractive tax benefits available for you, as an industrial property investor.

However, let’s explore a little further the disruptive influence of Amazon and eBay upon retailers. And how that is having a growing impact on industrial property.

Recent Trends

From all accounts, the rise of online shopping could well be behind the demand for industrial space – to a point where it reaches a record high this year.

The average annual take-up of industrial space over the past 10 years has been 1,165,700 sqm. And yet, according to JLL, there has already been over 1 million square metres of space leased during the first half of 2017.

It would seem the main drivers have been the retail, wholesale and transport sectors – as well as postal and general warehousing.

Historically, these sectors have accounted for 56% of leasing activity. Whereas, this year they have amounted to 72% Australia wide.

One of the main contributors so far has been Amazon, who has committed to its first distribution centre in Melbourne’s outer south-eastern suburbs – being a former Bunnings facility of almost 25,000 square metres.

Bottom Line: If things continue in this way, fulfilment centres may well become the major players – as retailers shape to grow their volume of online sales.

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