Developers Shift Industrial Assets to 'Mini Warehouse' Concept

Developers are repositioning industrial assets to cater to smaller industrial users in an increasingly costly market, according to a new report.

Colliers International's new radar report has found that the rise of the "mini warehouse" is bringing affordability to the industrial market.

Industrial real estate is still the most common type of commercial transaction across the country with 41 per cent of commercial sales represented by the industrial sector.

Demand for industrial property is fuelled by population and economic growth, rising non-mining business investment, increasing investment in e-commerce and the positive spillover effects from increased investment in public infrastructure.

There has been increasing demand recently for smaller scale industrial developments that can be utilised by small businesses.

In Australia, small businesses supply approximately half of the jobs in the market and make up around 20 per cent of gross domestic product.

This huge market has caused a number of developers to reposition their industrial assets to a smaller scale, making them more financially available for small businesses.

“As the economy grows, the dynamics of the industrial market have been evolving and therefore requirements for industrial space have been diversifying,” Colliers International industrial managing director Malcom Tyson said.

“With a significant pipeline of infrastructure development yet to be delivered, we can expect industrial value uplifts to continue to be supported by major infrastructure projects, boosting the efficiency of industrial operations.”

Related: Australia’s $70 Billion Infrastructure Boom and the Value Capture Model

Main image: Industrial stock in the Docklands viewed from above Port Melbourne, Victoria.