IN THIS ISSUE OF INDUSTRIAL PROPERTY NEWS ISSUE 167 | MARCH 2024 | 02 9630 8000 | PAGE 2 We explore the relationship between e-Commerce trends and industrial property use. MARKET INSIGHT SPECIAL Trends In e-Commerce Fulfilment and Industrial Property Use Bawdens is one of Sydney’s largest specialist Asset Managers for clients who own industrial property housing the city’s small-medium enterprises (SME). In the first of a two-part series, Bawdens recently released private client research that identified trends as to how our tenant SME’s are utilising their warehouse space today. The emergence of the importance of fulfilment is because increasingly SME’s are completing their own online fulfilment from their warehouse be that 200m2 or 2,000m2 space. Until recently, fulfilment from online customers of SME’s was outsourced to large specialist fulfilment providers. In 2022 in Australia, 82% or 9.4 million households made an online purchase valued at $63.8 Billion. In 2019, this was $28.6 Billion which highlights the continuing growth in online businesses. Today, we observe small-medium enterprises (SME) are increasingly sophisticated, agile and are taking market share from large multinational organisations. In a recent survey of lessees, we identified some of the following trends driving the desire of our SME tenants to invest and compete in the online universe: • The pandemic has changed the way consumers are prepared to shop. • Consumers want to support a local business online. • Social media commerce favours the SME. (In the US in 2022, the value of this trade source was $289 Billion and is projected to grow to $604 Billion by 2027.) • Improving reliability of connectivity and the advent of online shopping events like Black Friday. • Where appropriate, machine learning technologies are becoming increasingly available to SME’s that allow a (local to consumer) SME to deliver an individualised buying experience. • Our lessees have cited that having a mobile friendly website provides a competitive edge as more and more people are using their mobile devices for online shopping anywhere, anytime. In part two of our series, we consider how the future growth in online commerce will impact the demand for SME industrial property. L-R: Robert Ally - Director, Ben Rodriguez - Director Asset Management, Bechara Taoum and Tony Youssef - Associate Directors Asset Management Y
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