Take-up of industrial real estate continues to soar says Coutts Wetherill Park

"Demand continues to significantly outstrip supply – with availability at a record low, rents have inevitably been increasing. This has not just been prime industrial stock, but also secondary stock”, says David Ferreri of Coutts Wetherill Park.

The supply-demand dynamic has led developers to commence speculative schemes. This will go some way to alleviate the supply shortage, however these buildings are already attracting the pre-lease market which has never been stronger, says Mr Ferreri.

There is no mistaking that the industrial and logistics market is thriving and there’s a real depth to occupier demand from a variety of sectors. With low interest rates, many of those occupiers are considering both purchasing and leasing. With such competition from owner-occupiers, the traditional industrial property investor is fighting a losing batter to source good property investments.

Those investors in the market well and truly understand the resilience of the sector in the current pandemic environment. However, with a scarcity of property available, we have observed a shift toward more opportunistic and speculative purchases.

A recent example, Mr Ferreri cites is recent off-market sale of 2 Hume Road, Smithfield. The site consisted of 5,018sqm and 1,314sqm of building selling for $6,400,000. Given that the site was significantly compromised, thus necessitating significant works by a purchaser, the vendor achieved an outstanding result.

*Image of recent off-market sale at 2 Hume Road, Smithfield.