As land value continues to grow at an exponential rate, will Australia embrace the multi-storey warehouse?
Australia’s major cities are currently experiencing a lack of supply in industrial land, additionally in Sydney, Melbourne and Brisbane the land that is available is becoming increasingly expensive.
According to Colliers International research, Sydney land values have grown by 15 per cent in the past year. While regional locations may present opportunities for occupiers to take advantage of more space and lower costs, this may not be the solution for logistics providers who have a need to get their goods to market faster than ever before.
Colliers also found that there is considerable financial advantages in the location of a facility for the best networking solution across the eastern seaboard. Leaving Australia’s major cities as the most attractive location for warehousing.
According to Peter Evans, National Director, Occupier Services at Colliers International multi-storey warehousing in urban area could strengthen over the next few years as it addresses both the scarcity and high cost of land.
“Vertical warehouses are becoming a popular option to combat the decrease in space, especially within major cities,” he says.
The rising demand for last-mile logistics space close to urban areas may lead to Australia seeing high-density industrial developments like those found in Hong Kong and Singapore.
TM Insight forecasts that there will be demand for at least 300,000 square metres of warehouse space in inner Sydney in the next five years, which may meant that the vertical warehouse could be the only option.
While we are yet to see the 30-storey type sheds that Asia has been implementing for years, there is already some organisations taking up the idea of a multi-level warehouse.
One example is Woolworths industrial highbay in Dandenong, Victoria. Reaching 45 metres tall, the purpose-built facility is the largest industrial highbay structure in Victoria. The facility boasts over 69,000 spm of warehouse and corporate office space.
With multi-story racking systems, high-speed conveyors and sorting systems the centre provides Woolworths with the capacity to sort and distribute stock at far greater levels of accuracy and at a pace not ready available in traditional warehousing operations.
Vaughan Constructions delivered the facility for Woolworths and the two organisations spent three months of planning and development.
“Constructing a facility of this size and stature required the creation of unique installation techniques. Due to the sheer height of the highbay, sprinkler installation differed significantly to the majority of warehouses completed nationally,” Andrew Noble, Managing Director, Vaughan Constructions says.
The facility is operational 24 hours a day and operates seven days a week and supply Woolworths stores in northern and eastern Victoria.
The project cost $562 million, with more than $350 million going into automation and construction. However, the facility is expected to deliver cost savings and productivity savings of up to $50 million per year.
The new 17-level bay facility can potentially hold 220,000 stock keeping units, compared with 6,500 in a conventional warehouse.
“Vaughan is proud to partner with Woolworths to once again support supply chain expansions and operational efficiency improvements, furthering their national growth,’’ Andrew Noble, Managing Director, Vaughan Constructions.