Warehouse property investment

Australian warehouse real estate is growing in demand

Logistics and warehouse businesses have been hailed as essential services, keeping the head of Australia’s economy above water during unprecedented times caused by COVID-19.

Warehouse real estate investments in Sydney and Melbourne, especially in precincts with good connectivity and access, are capitalising the most on Australia’s growing eCommerce sector. The country’s two largest cities are breaking eCommerce growth records, and the demand for warehouse space is reflecting this.

While it’s not a competition between commercial asset classes, industrial is indeed the current winner of outperformance in the commercial real estate market.

Why industrial and warehouse real estate is a good investment:

• Higher yields than residential real estate and prevailing interest and bond rates. Many are putting investment dollars into industrial real estate like warehouses, which can offer annual yields between 5% and 7% (and sometimes higher).
• Growing tenant demand, largely a result of Australia’s online retail and eCommerce boom, which has seen more logistics and warehouse companies sprout up in the country.
• Modest site coverage ratios (the ratio of building to land), which means industrial warehouse investors can benefit from appreciating land values and are less impacted by depreciating building values.
• Significant capital appreciation opportunities from the increasing relevance of warehouse assets in Australia.

Properties & Pathways invests in industrial warehouses around Australia, and we also take an interest in every investment alongside our investors.

To find out how both wholesale investors and first-time investors are building lasting wealth investing alongside us, get in touch with our team today.