The current lockdown and border closures across Australia is impacting a vast range of businesses; however it is only boosting Australia’s industrial property sector.
A massive boom in e-commerce and last-mile logistics is causing the need for industrial property to cater to the resultant big-shed leasing frenzy. With warehouse construction at an all-time high, rising property prices and a shortage of industrial space, the industrial boom still has a long way to go.
The sheer weight of this market rests upon the shoulders of logistics and transportation, and any move in their market also impacts industrial property.
Logistics and transportation have been wrangling with the task of creating a more environmentally friendly, long-term business model for quite some time now. This includes the use of electric vehicles. So, naturally, the rise in electric vans and trucks is jarring the industrial property sector.
There are currently new fleets of electric vans and small electric trucks already on urban roads across the country. They are delivering anything from mail to furniture. However, the switch to electric vehicles has only just begun, and the current fleet is only making a dent in the overall electric vehicle goal of the transportation and logistics sector.
It isn’t a simple feat, but it is one of the goals of many transport companies who are looking to reduce their environmental footprints. As organisations, they have sustainability goals that they want to meet. These goals will gradually push their way into the industrial property sector.
One of these companies is Linfox. The Linfox executive chairman Peter Fox said, “The majority of Linfox’s carbon emissions comes from transportation tasks”. So, as they move towards their zero-emissions goal, they will need to change their fleets and ultimately become carbon emission friendly.
The current rise in the popularity of electric vehicles is not only a prominent topic for logistics and transportation. Throughout the industrial property sector, developers predict the inevitable future that they will need to meet the demands of environmentally conscious tenants.
Owners of industrial property will eventually need to accommodate the future environmental goals of their tenants. This means some properties will need an overhaul in terms of upgrades to accommodate these growing needs. While it may be a costly endeavour, what could cost developers and owners more would be if they were reluctant to the inevitable change and find themselves behind the trends when it’s too late.
Even changes to accommodate electric vehicles will be huge, from increasing power to sites and the space to fit charging stations. It won’t only involve the property owners but also electrical companies.
The government also understands the private sector plans for an increase in electric vehicles. A paper called the “Future Fuels Strategy” outlines the government’s plan of funding and grants to assist with the shift to electric vehicles. This includes co-investing with the private sector in regard to changing infrastructure, such as installing chargers on industrial properties.
The Victorian government specifically has also committed to increasing the number of fast chargers across Victoria, including rural areas to assist with transport and logistics.
While we all know change is on its way, there will be no telling the full-scale impact it will have industry-wide on industrial property and the market, until it happens.
Keeping ahead of these trends is vital, especially in a volatile industry such as industrial property. So, how do you think the rise in electric vehicles will impact the sector?