Global commercial real estate experts from Cushman & Wakefield have spoken about the current state of cold storage demand in Australia. Food & Beverage Industry News reports.
The global cold storage market, which has been valued at USD $112 Billion, continues to experience some issues around a rising demand.
With the market predicted to grow to at least USD $272 Billion by 2028, at a CAGR of 12.17 per cent, that demand is not expected to ease anytime soon.
Cushman and Wakefield, global experts in commercial real estate services, is seeing first-hand the demand for more cold storage, particularly in Australia.
David Gibson, Cushman & Wakefield’s director and head of Brokerage Industrial & Logistics – QLD, said the demand for cold storage facilities was not new to the industry, but Queensland was seeing increasing demand.
“It’s worth noting that the demand for cold storage facilities has been growing in recent years, driven by factors such as an increase in online grocery shopping and the need for temperature-controlled storage for pharmaceuticals and vaccines.
“There has been a lack of new cold storage development in the Queensland market, which has resulted in limited opportunities for tenants seeking such facilities, but there is potential for new developments that incorporate the latest technology and efficiencies to meet growing demand.”
Morgan Ruig, Cushman & Wakefield’s director Industrial Sales & Leasing, QLD, said the multiple sectors requiring cold storage also played a key role in demand for facility space.
“There is a cross-sector of groups attracted to cold storage, including food and beverage companies, pharmaceutical manufacturers, biotech companies, and logistics providers,” said Ruig.
And each group, in most cases, also require individual requirements.
“These groups may require cold storage for a variety of purposes, such as storing perishable goods, ensuring product quality and safety, and meeting regulatory requirements,” Ruig added.
In the past, fit outs might have been a more sought-after solution to help find cold storage facility space, but the wants and needs of clients in 2023 has shifted.
“A common trend across industries is tenants’ preferences for new facilities with more efficiencies,” said Matt Richards, Cushman & Wakefield’s director – Brokerage Industrial & Logistics – QLD.
“Tenants are often looking for facilities that are more energy-efficient, have better technology and automation, and offer more flexible leasing options.”
“In the cold storage sector specifically, new developments that incorporate these features may be more attractive to tenants than older, less efficient facilities.”
The need for new facilities is also being driven by some cold storage facilities reaching the end of their lifespan or building obsolescence.
“As many cold storage facilities approach the end of their lifespan, there is a need for new facilities that offer more efficiencies and are better equipped to meet the demands of today’s market,” said Richards.
“Newer cold storage facilities can incorporate the latest technology and design features that help to optimise energy efficiency, reduce waste, and streamline operations.
“For example, newer facilities may have better insulation, more efficient refrigeration systems, and automated systems for inventory management and order fulfillment.”
As a result, its expected many clients will be seeking out newer facilities.
“Tenants looking for cold storage facilities are likely to be attracted to these newer, more efficient facilities because they can offer cost savings and help to meet sustainability goals,” said Richards.
And a big advantage to building s facility from scratch, is the ability to fit it out to meet specific requirements.
“Newer facilities can be designed to meet the specific needs of different types of tenants, such as those in the food and beverage industry, pharmaceuticals, or logistics providers,” said Richards.
A state-of-the-art cold storage facility in Ormeau, Queensland, is a prime example of what Richards, Ruig, and Gibson have spoken about.
“The facility is a brand new, 11,175sqm turn-key, dual tenancy, cold storage logistics development on a 21,790sqm parcel of land, which offers state-of-the-art design and refrigeration technology which allows for ultimate flexibility to operate the facility as 100 per cent chiller or 100 per cent freezer or a combination of both,” said Gibson.
“The facility is located within the Yatala Enterprise Area (YEA) in Ormeau, one of the most strategic logistics and distribution hubs in South- East Queensland, mid-way between Brisbane and the Gold Coast, benefiting from direct exposure and immediate access to the Pacific Motorway (M1).”
Supply and demand also makes the facility more desirable.
“Temperature control warehousing is the ‘hot ticket item’ on everybody’s check list, and there is just not enough available stock to meet this demand, which makes this asset so special,” said Gibson.