The Australian industrial property market has experienced an unprecedented surge, propelled by soaring warehouse rents and a flurry of mega developments, driving its value to nearly $300 billion, according to recent research.

Brisbane, in particular, has seen a significant transformation in the industrial landscape, fuelled by the e-commerce boom, which has boosted warehouse rents by 45% since 2021.

Elsewhere in Australia, vacancy rates plummeted to 1% in Sydney and Melbourne, among the lowest globally. As such, prime logistics assets have become increasingly sought-after by global fund managers, reshaping the commercial real estate sector.

The surge in warehouse values has marked a pivotal moment in the industry. Industrial property now comprises 34% of the commercial real estate investment market, trailing closely behind the office market at 35%.

It is expected that investment in the industrial and logistics market will reach $410 billion over the next decade, making it the most profitable commercial asset class. Although the growth rate may slow down due to higher interest rates, the value of industrial properties has been maintained by the steady increase in rental prices, which has compensated for the significant decline seen in the office and retail sectors.

Given the persistent demand for industrial property, Brisbane is well-positioned to play a major role in the sector's ongoing expansion, attracting significant capital looking for investment opportunities in the city's thriving industrial market.

Information source: Australian Financial Review