Backed by major tenants including Linfox and Australia Post, industrial and logistics property manager, Growthpoint, has identified new expansion opportunities in Brisbane and Sydney.
This follows the formation of the Growthpoint Australia Logistics Partnership (GALP) in 2024 with six existing industrial assets in Melbourne, Sydney and Southeast Queensland (SEQ) valued at $198 million.
Growthpoint is the investment and property management for those assets.
Earlier this year, GALP exchanged contracts for the purchase of a $40 million industrial and logistics asset in Stapylton, Queensland, and is actively pursuing further opportunities to expand the partnership with further acquisitions of high quality assets.
“We’re really positive on industrial and logistics, it’s a very appealing sector,” said Growthpoint Chief Investment Officer, Michael Green.
“We think there’s good momentum from a macro level although some of the micro market conditions are a bit challenging in certain areas.”
Brisbane and western Sydney offer the best investment opportunities because of infrastructure development and population growth, while Melbourne’s north and northwest is impacted by excess supply, according to Green.
On Sydney’s outskirts, growth is reported to be propelled by the development of the Western Sydney International Airport at Badgerys Creek plus the roads, freeways and rail lines servicing it. There is further growth in the southwest region including the planned city of Bradfield.
Population growth for SEQ is forecast to be 1.8 per cent per annum (according to the report ShapingSEQ 2023) which is behind western Sydney at 1.9 per cent (KPMG study from 2022).
“We like Sydney and Brisbane,” said Green. “The outer west of Sydney has a little bit of supply on the horizon but over time we think that’s going to be a very resilient and well performing market.
“Brisbane is a big growth story with spending on mining, health, transport and sporting infrastructure ahead of the 2032 Brisbane Olympics, and we think that presents buying opportunities for existing assets because new construction is challenging due to competition from Government infrastructure projects.
“From an immediacy perspective our focus is on Sydney followed by Brisbane and southeast Melbourne.”
Proforma for the recent acquisition, Growthpoint’s industrial platform is valued at approximately $1.7 billion, comprising 30 properties across New South Wales, Queensland, Victoria, Western Australia and South Australia, running at 98 per cent occupancy.
The business is underpinned by significant multi-tenancy partnerships with some of Australia’s biggest companies including Woolworths, Linfox and Australia Post.
An established portfolio enabled Growthpoint to benefit from the post-Covid industrial boom, when rents rose with ‘unprecedented velocity’ as did capital values across all major markets.
Face rent growth in the twelve months to 31 December 2024 were 9.0 per cent in Sydney, 10.8 per cent in Melbourne and 12.9 per cent in Brisbane, and Growthpoint’s releasing spreads on its directly owned industrial properties was 21 per cent in the six months to December 2024.
“We’re still seeing rent growth, just not at the same unsustainable velocity, reflecting the better balance between supply and demand,” said Green.
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