Changes coming in the warehouse sector, says Goodman

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Tenants like Amazon, which opened its first robotics fulfilment centre at Goodman’s eastern creek site last month, are focused on the sustainable features in the warehouses, such as the power conduits and electricity, the parking stations, electric vehicles and minimum waste.

At its quarterly update, Amazon posted a $4 billion loss ending March 31, the first quarter in red figures since 2015. Amazon chief executive Andy Jassy warned that the group would scale back some of its expansion plans to focus in existing space over time.

Goodman said it’s important for efficiency to keep the centres closer to the population centres.

“You can’t keep pushing housing and infrastructure further and further out. With industrial developments, there will be more regeneration regarding certain locations in and around the cities, rather than just pushing the infrastructure further and further out,” Goodman said.

Regarding the supply chain issues that are impacting the global economy, Goodman predicts there will be a “wave of nationalism” where people want more of their own product generated in their own countries.

He said that is going to be an important issue in the future regarding the supply-and-demand equation.

“The global economy just got bigger; it got smaller pre-pandemic, then all of a sudden it just got way bigger,” Goodman said.

He said more tenants will look to increase efficiencies in ordering and storing goods as much as possible to avoid supply chain issues, and that will underpin the demand for sustainable warehouses.

Investors have not been deterred by the concern of headwinds, with MSCI Real Capital Analytics reporting that the industrial sector continued at full steam, posting the highest level of volumes in the first quarter of $4.1 billion.

Real Capital Analytics head of real estate research, Pacific, Benjamin Martin-Henry said the deals in industrial properties eclipsed the retail sector, which reported $2.7 billion in first-quarter deals and the office sector with $3.4 billion.