Key property fundamentals, such as rental rates, property values and yields, are expected to improve in 2012-13
Melbourne, Australia (PRWEB) July 23, 2012
IBISWorld estimates that revenue for the Industrial and Other Property Operators and Developers industry in Australia will increase by about 4.6% to $22.6 billion in 2012-13, which is roughly the same level of revenue generated in 2007-08. According to IBISWorld industry analyst Tim Stephen, “the industrial property market has stabilised and returned to a modest growth pattern in 2012-13”. This was in line with improvements to the domestic economy and financial conditions. The growth in inventory levels, imports and manufacturing activity, though subdued, led to increased demand for industrial property space. This has strengthened the key property fundamentals such as rental rates, property values and yields (rents divided by property values) during the year.
The Industrial and Other Property Operators and Developers industry performed poorly in 2008-09 and recorded a flat performance during 2009-10. Stephen adds, “the global financial crisis had a resounding influence on the industrial market and substantially reduced the demand for industrial products”. As a result, the demand for factories and warehouses was negatively affected, leading to a drop in revenue. Market share concentration in the Industrial and Other Property Operators and Developers industry is low. The industry is made up of individual investors, property syndicates and smaller property groups and trusts. This indicates that the market is largely driven a number of players, instead of by any individual company. There are thus no major players in the industry.
The future of the Industrial and Other Property Operators and Developers industry looks promising. Steadier demand for industrial products is expected to return to the market from 2013-14. This demand will stem from improving economic conditions, increased imports, strengthening employment, growing wage levels and rebounding business confidence. These improvements to the domestic economy, combined with increased access to finance, are expected to drive business spending volumes and, consequently, demand for industrial products. This is anticipated to increase the demand for industrial space through strengthening manufacturing production, import volumes and inventory levels.
For more information, visit IBISWorld’s Industrial and Other Property Operators and Developers report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry consists of operators that lease out industrial and other commercial property (excluding office and retail).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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