Lack of space forcing logistics operators to diversify their footprint

MELBOURNE, 22 August 2022 – Australia's largest privately owned container logistics operator ACFS Port Logistics has leased a brand new speculatively developed state of the art distribution facility in Derrimut.

ACFS Port Logistics is increasing their warehouse space, adding 24,010 sqm to house the groups’ rapidly expanding footprint, amid unmet demand for prime industrial and logistics assets.

JLL’s Greg Pike, Matt Crofts and Peter Blade together with CBRE’s Todd Grima brokered the deal for 97 Australis Drive, Derrimut on behalf of JK International.

Mr Grima said, “Vacancy in Melbourne’s West for assets 10,000sqm and above is currently less than 0.5%, and is a significant problem for many of the growing logistics and 3PL operators.

“The Derrimut property was leased upon practical completion with zero down time to ACFS Port Logistics, who are expanding their national footprint due to growth in demand from their 3PL and transport customers.

Mr Pike said, “It’s similar circumstances in Sydney, with vacancy at record low levels. Frustration among national transport and 3PL occupiers is forcing them to come up with creative solutions and diversified east coast footprints to continue to house the significant growth of their customers.

“We don’t anticipate this continued imbalance of supply and demand to plateau or ease until late 2023, potentially into 2024,” said Mr Pike.

Limited opportunities for occupiers to secure modern warehouse space continues to translate into face rental growth.

Mr Crofts said, “Rents in Melbourne’s west are now exceeding $100/sqm (net) for quality speculatively developed assets, with limited supply for the rest of 2022. Moving into first half of 2023, this trend will likely see rents push to $110/sqm.

“Rental growth will likely remain on an upwards trajectory over the short-term until sufficient speculative supply delivery satisfies unmet demand,” said Mr Crofts.