Charter Hall, LogiSpace, Barings, Hale See Aussie Sheds on the Rise: MTD TV

Falling interest rates, a strong economy and e-commerce growth will continue to support Australia’s red-hot warehouse market, according to speakers from Charter Hall, LogiSpace, Barings and Hale Capital Partners in the final session of Mingtiandi’s 2025 APAC Logistics Forum on Thursday. Watch the full recording>>

A rebound in logistics transactions that began last year is set to persist as investors seize on Australia’s status as a safe haven from trade wars and geopolitical tensions, the guests told MTD TV viewers during the forum, which is sponsored by Yardi. Trades of warehouse assets surged 40 percent in 2024 to A$7.2 billion ($4.6 billion) and are expected to expand that total by a further 38 percent in 2025, according to Cushman & Wakefield.

With borrowing costs easing and core industrial real estate flashing cap rates between 5.25 and 5.5 percent, the investment environment is conducive to higher returns, according to Richard Stacker, industrial and logistics CEO at fund manager Charter Hall.

“First, the economy is in pretty good shape, and if you compare it to global competitors for capital, Australia is well positioned,” Stacker said. “The impact of tariffs is almost minimal. And, realistically, two, we’ve got a very conducive environment with falling interest rates.”

Demand Rebound

Troy Bryant, founder and co-CEO of Sydney-based LogiSpace, noted that after a moderation in demand in 2024, he expects logistics activity to continue to improve as the economy gets better, boosted by a strong tailwind from declining interest rates and more cuts likely on the way.

“Demand is directly related to household spend, as people get a little bit more confident around what they’ve got to spend at home, interest rates coming down, a bit more money to spend, we should see volumes start to tick up,” Bryant said. “As the volumes tick up, there’ll be more demand for warehouse space. It’s just that lag that can sometimes take six, nine, 12 months.”

James King, senior director for portfolio management at Barings Real Estate Australia, said the country’s attractiveness could be down to its safe-haven status, the resilient “beds and sheds” theme and what he termed a “shrinking accessible market” for investors within Asia Pacific.

“The government stability, the fact that it’s highly transparent, it’s efficient,” King said. “Is the safe-haven factor amplified? Yes. But I think it’s also always sort of benefited from being a safe haven. Back of the envelope, if you think of every dollar of allocation that comes into APAC, it’s probably 40 cents into Australia, 40 cents into Japan and 20 cents everywhere else.”

At Hale Capital, managing director Robert McMickan is executing a strategy based less on the timing of cap rates and interest rate cycles and more on cash flow growth in infill markets with shorter drive times to growing populations.

“In offshore, more established markets which tend to kind of have trends occur a number of years prior to Australia, we’d seen a very strong bifurcation of market rental growth in infill locations relative to non-infill locations,” McMickan said. “So when we identified that there wasn’t necessarily specialisation in the space, we obviously saw the market opportunity. And really the primary driver of our investment thesis is to invest in assets in markets where there’s a high barrier to entry.”

Data Centres and Tokyo Ahead

The Australia session wrapped up Mingtiandi’s annual logistics event, with MTD TV set to return in September with a five-part series focusing on digital infrastructure in Asia Pacific.

The sixth edition of the Mingtiandi APAC Data Centre Forum will welcome speakers from key regional players including ESR, NTT and Rava Partners, as they discuss strategies to meet surging demand for digital services and infrastructure.

Mingtiandi’s 2025 schedule concludes on Wednesday 5 November with what’s set to be the biggest international real estate investment event in Japan this year, the Mingtiandi Tokyo Forum at the Mandarin Oriental Tokyo.

After the inaugural Tokyo Forum welcomed 208 in-person attendees in 2024, this year’s full-day event will bring together global investors and local decision-makers to discuss opportunities in Japan’s commercial, industrial, living and lodging sectors, as well as spotlight top players from Brookfield and Warburg Pincus in exclusive one-on-one interview sessions.