Kathryn House
Hello and welcome to Talking Property with CBRE. I'm your podcast host Kathryn House, and in our latest episode we'll be discussing the factors shaping the industrial and logistics sector. CBRE recently staged an Australian client event dubbed the Tale of Three Cities, where we discuss the outlook for the Eastern Seaboard as well as some of the current global trends. To follow up, I've roped in two of the event panel speakers to give you the download.
Anna Maras
Australia still has a lot of room for e-commerce growth. The next three to four years are likely to unlock a new wave of digital consumption. So that's as speed, convenience and seamless digital experience catch up with our, as in the Australian consumer's, high expectations.
Kathryn House
That's Anna Maras, Charter Hall's Head of I&L Asset Management.
Mick Bowens
I've heard stories of Chinese e-commerce players turning up in the market on a Monday, look at some spaces by Friday, heads of terms are agreed. That seems insane in a market like Australia or Europe, but that's just the way it is.
Kathryn House
And that's CBRE's APAC Head of I&L, Mick Bowens. Now, this is a bit of a longer episode than normal. But I'd urge you to stay around because we get into some really interesting topics later in the podcast including what's happening with tariffs and all the activity that's being driven by Chinese e-commerce groups. Anna, it was great to meet you recently and thanks for taking the time out to join Talking Property.
Anna Maras
Thanks Kathryn for having me.
Kathryn House
And Mick, they say the Irish have the gift of the gab and you didn't disappoint at our client event. Thanks for coming onto the show to share some international intel.
Mick Bowens
Well, I do love to talk sheds, Kathryn, so I might have got a bit over enthusiastic, but this is my first podcast. I'll try to stay on point. Thank you for the invite. Really love being here.
Kathryn House
You can never be too enthusiastic. So, to set the scene, Anna, perhaps you could kick us off by telling us what you're seeing from an Australian I&L perspective. You mentioned at our event that Australia's east coast is continuing to screen incredibly well.
Anna Maras
Yes, thanks Kathryn. Good question. So, I think what I mentioned is that the east coast of Australia continues to screen well for industrial & logistics investors, and it's due to a convergence of those powerful secular tailwinds that we all know too well. So, more people. We have three times the G12 average in population growth, more spend by that population online. So, despite my best attempts at online Mick, I don't know how your family goes with online shopping, but we're still relatively under penetrated on a global scale, meaning there's room for further growth. We have great ongoing infrastructure investment and shifting supply chain dynamics, so all of those inputs bode well for continuing occupier demand. Secondly, the prime market is now entering that cyclical upswing phase and indicators are kind of at their strongest position since mid-2022. So, signalling for investors it's the right time to re-enter the market. And I think there's great institutional confidence Mick, I'm sure you'll agree in the landscape and some investors are still underweight so it's an attractive point in the cycle to come back and I think market trades are really demonstrating that confidence. From a Charter Hall perspective we have some fantastic opportunities to unlock value. We've got a 90% dominance to the east coast and it's in those core industrial locations, great access to infrastructure and supporting those really productive and efficient supply chains that our customers tell us that they’re demanding of their locations.
Kathryn House
That's a great cover off on Australia. Mick, our Australian Head of Research shared that we continue to have one of the lowest I&Lvacancy rates globally despite the national average increasing slightly in our latest survey to 2.8%. Can you give us your take on how Australia is positioned from that international perspective? You shared some of your observations from a recent trip to Europe.
Mick Bowens
Yeah, sure, look I did. I mentioned you guys were number one in terms of vacancy at one stage there post pandemic and I know Australia loves to be number one at everything, but you can't be number one at everything all the time. So, things have obviously normalised a bit for you guys there. But to put it in perspective, in my part of the world, starting with APAC, the average vacancy rate is more around 10-11%. But as I mentioned, APAC is a very diverse and broad region. So, you've got performance of some cities being really divergent. Case in point China. It's large enough to have variances across its major cities and places like Beijing and Shanghai are more 20 to 30% and you might even have submarkets or particular development within those cities. That's even higher in Southern China. Shenzhen and Guangzhou, that's the home of your cross-border, e-commerce, your Shein and your Temu, et cetera. They've got more of a vacancy rate around 8%. If I go around the region. So, Japan, again it's a little bit diverse. So, vacancy rates there have crept up to about 11%, which is pretty high for Tokyo. And then Osaka, which is a very hot market right now. So that's lower on 3.8%. In Seoul. Korea had a bit of an oversupply issue, particularly in cold storage. So, in cold storage you had a vacancy rate of about 40%, dry storage being more around 16%. Where I'm sitting right now in Singapore, which is a very mature market, but it's a very constrained market. You've got a vacancy rate closer to about 8%, quite the broad range. And vacancy rates are considerably higher than Australia. Just quickly on Europe, yes, I was there recently and the vacancy rates there would be more around 4 to 5%. And they are seeing that they will stabilise throughout 2025. In the US, from memory and from talking to our colleagues there, it's more around 7%. That's one of the highest rates since I think about 2015. And it's kind of been increasing over the last 10 to 11 quarters consecutively. So, look, your vacancy in Australia is still comparatively low to many other major markets in the other regions.
Kathryn House
So maybe if we turn to the capital markets side of things and zero in on some of the key Australian cities. While the investor preference does seem to be Sydney, Brisbane was singled out by a few of the panellists. Anna, why do you think Brisbane is rating so well despite the introduction of a foreign investor surcharge? I know Chris O'Brien from CBRE expressed on the panel that he thought Brisbane had surprised on the upside by punching through this tax.
Anna Maras
Yes, and I completely agree with what Chris said actually, because Brisbane does continue to rate well with investors. And it's certainly something that when we're talking to investors, both foreign and domestic, that that capital does have an attraction to that state even amid these policy hurdles like the foreign investors surcharge. And that's due to that combination of a few things. Really strong population growth, GDP expansion, increased infrastructure spend, all of which really contribute to sustained demand for industrial assets. If you look at it, Brisbane's experiencing some of the fastest population growth in Australia and it's driven by that interstate migration and natural growth. So, we had a look at some ABS stats which sit behind it. And net interstate migration far outpaces that of Sydney and Melbourne. So, this growth directly increases demand for consumer goods, housing services and really fuels that need for logistics. As we know, the city is undergoing a major infrastructure boom. So, it's the Olympic city, right. And we're all fuelled in that city by preparation for the Games in 2032. There's a greater spend per capita on infrastructure of any capital city and that is really enhancing that long term value of industrial precincts. If I look at it across our stable book and we’ve got, as an example, we've got 100 hectares or about 550,000 square metres that we're developing at Flagstone Logistics Hub. We've got fantastic inquiry, we're seeing great rental reversions and I think it's really indicative of those strong thematics in that state.
Kathryn House
So, what are your views, Mick?
Mick Bowens
Well, I love fielding questions on cap markets considering I'm an occupier guy.
Anna Maras
Well, Mick, I kind of answered like an occupier then.
Mick Bowens
And look, the truth of the matter is, major investments are reliant on the occupier sentiment, the occupier demand. So, I do spend quite a bit of time talking to people like Anna and her peers because they need to know, look who's going to fill up my shed. To put it quite simply, industrial investment, we've enjoyed the spotlight for the last couple of years and it's awesome to see us go from the poor cousin to being the sexy, in demand, shiny asset class that everyone's after. Based on what I see myself, from talking to both occupiers and investors, Australia absolutely remains a top, top destination. Across APAC, industrial is still the number one asset that people want to invest in. There was quite a delta, let's say in 2021, between industrial and office and for obvious reasons industrial & logistics was very much sought after. That gap is narrowing now based on our most recent investor surveys, which we sent out to about 4 or 500 people across the region. But look, super prime logistics in Australia as well as dry assets in the core areas of Seoul, Korea. These are like the number one and two investment destinations for capital in Asia Pacific. Japan and Singapore, they're obviously still very, very top spots in the region because they're such mature markets and then as kind of more outliers and more of an opportunistic or a value-added play. You'd see places like Vietnam and Thailand emerging. But happy to report Australia is still very much the key focus for capital as far as I can see.
Kathryn House
Well, perhaps we should segue to rents now, so it would be great to get your take, and you know, rents have clearly stabilised after some pretty significant growth in Australia in recent years. And while CBRE's Pacific Head of I&L Leasing, Mike O' Neill mentioned that inquiry levels had surprised on the upside at the start of the year it hasn't necessarily translated into more leasing activity. What are you seeing from a Charter Hall perspective?
Anna Maras
It's a good question because first Kathryn, I kind of comment that new industrial supply is pretty significantly challenged both in provision of employment lands, but also in servicing and costs of those lands. So, space creation versus the thing we've been talking about, population growth will be a tailwind for existing asset rent growth and value. So, if we look at where demand and growth has been since 2022 and I'm sure that Mick's been living his best life because we've seen just the strongest growth in history, it has been exponential and that's driven vacancy rate as Mick said, it's close to zero in some markets. So, you know, Sydney got down to 0.2% as an example. This has meant we've seen almost two years of double-digit rental growth. And so, I think we'd expect some normalisation at some stage. I must say that again it's as much a story of submarkets for me as it is states because there are still some submarkets within states that are still performing at those double-digit levels. So, if I look at the Charter Hall book as an example, we've got almost a 99% occupancy and we're continuing to experience really strong demand for prime and sustainable industrial space across our key locations. We're well positioned to really take advantage of those structural and cyclical influences in the market, particularly because of where we've chosen to locate our assets. And you're positively impacted by that urbanisation and that rise in consumerism. We've been quite deliberate, Kathryn, around our long WALE strategy. It certainly hasn't, you know, if Mick or a capital partner was to talk to you, it hasn't been in vogue over the last two years. You know, you've had to question has long WALE been the right decision? But we think it's really resilient and it gives us great access to reversion without really exposing us to risk in a more moderated leasing environment. So, it's been quite a deliberate approach. Demand is holding up because it's been driven by the need for greater productivity. And I think we spoke about this on the panel, Kathryn, but we're certainly seeing that play out across the consumer staple industry sector where there's that demand for modern, automated and really robotic fulfillment centres. And these are supply chain critical infrastructure style assets that are servicing the consumer. It's servicing me, you know, who needs my groceries for example? Maybe four days used to be okay, four days to two days, two days to two hours now. And they're needing highly efficient and productive supply chains and that's really shaping a lot of the demand and really an influence of how technology is driving that industry sector. So that's a bit of a summary from my view.
Kathryn House
So, Mick, what are you seeing at an APAC and global level on the leasing front?
Mick Bowens
In APAC, our rents are under a little bit of pressure. That's due to the influx of new supply and, you know, while the onset of all of this uncertainty, global trade, tariffs, et cetera, it's led our occupiers to be more conservative, take a wait and see approach. Across the region we see landlords having to be a bit more accommodating in asking rents and/or incentives in order to attract tenants. So, it's bit of a mixed bag picture again in APAC, is the summary, but it's certainly not doom and gloom. it's a bit more slow and steady. And then just quickly touching on Europe. So, in Europe, based on our latest research and talking to people that I met there recently, they're forecasting that prime rents are going to increase by about 1.8 to 2% on average. That's for the top European logistics centres. Then in America, so while some of the markets may see a slight dip in rents due to increased vacancy, overall, the rents are expected to continue to grow, particularly for high quality modern spaces averaging about 1 to 3% growth. So aside from some of the anomalies here and there, the key indicators regionally, globally are that rents are either normalising and or growing at a more modest rate.
Anna Maras
Kathryn, I might just pick up on something that Mick said there that I think is really intrinsic to what's happening across the east coast from an occupier demand perspective. And that is a bifurcation to grade. We certainly saw it in the office sector that obviously has gone through pretty structural, big structural change just driven by, you know, working from home or working patterns. And you saw occupiers trade up to prime space and we're certainly seeing that in this market. So, the other big point of attraction I'm seeing at the moment is sustainable space. So green credentials has value. And what I mean by that is when we looked across our occupier book, 60% of the top 100 occupiers have a net zero ambition. And so not only are you aiming to assist them to achieve that ambition, but secondly, you're looking to deliver a renewable platform for them. And there's some energy market pricing volatility. You can take that out by providing them with clean technology solutions. We're seeing maturity in that landscape. We're seeing people, you know, big third-party logistics operators, for example, come to us and say our service level agreements now have some reference point to being green and that's important. So, I think that bifurcation to grade will only play out more significantly probably while there is a little bit more supply in the market. So, I think I just wanted to reference Mick's point there.
Kathryn House
So, let's move on to a few trends that had everyone talking at our client event. And one of those was multi-level warehousing. And there was a real debate about the prospects for multi-level, which is still very much at an early stage in Australia. In Sydney, there's been speculatively stock built, but it's not leasing quickly in some instances. What are your thoughts? You mentioned on the panel that you think we might be one cycle too early in some Australian markets.
Anna Maras
Yes, Kathryn, when we look at multi-level, it really becomes viable when land values reach a certain threshold, when land supply is highly constrained and locations have to be, in my mind, very supply chain critical, which is justifying economic rents for occupiers. So, in Australia, and Mick will have a very different experience, but industrial models are single level predominantly and that development is more cost effective. But as land prices have escalated, we start to move to a more vertically integrated model to maximise floor space and site utilisation. Higher land values can create greater scope for feasible developments when it's compared to those underlying construction costs. So, South Sydney is an example where land values are high and there's a requirement for goods to be stored near the consumers for final mile. And particularly given that it's surrounded by quite a dense population, multi-level as we know is already gaining traction. And by multi, we're not talking about mixed level of 17 levels of multi, we're talking about two to four levels, right. But if you look at rents across the east coast market, rents in the South Sydney market are the highest across the country. So, you're justifying the economic rent when you compare it to being in South Sydney in a single level as an example or in a multi-level. And I can talk about it when we kind of talk to probably our product and what we think has really made that stack up in the market.
Kathryn House
So, Mick, multi-level warehousing is a way of life in Asia as you're not blessed with much land. You mentioned you'd hosted quite a few Australians to look at multi-level facilities across the APAC region, some of which are more like office towers as Anna was mentioning, being, you know, up to 17 levels or more. What's been the feedback that you've had from these Australian investors when they come to look at multi-level?
Mick Bowens
Yeah, well, first of all, you're absolutely right. We just don't have an option in the likes of Hong Kong and Singapore. As I mentioned on the panel, Singapore is 42 kilometres from one side of the country to the other. So, we are severely land constrained. It's not an option, it's just something that we're used to. And the same applies for Japan which does have a bit more space, but multi-level is very much the norm. And even China now. But going back to Australia, yes, absolutely. We've had some people come through the market here in Singapore and Hong Kong. Indeed, I've hosted them, and I've been out with them. The general reaction is there's fascination with these very, very high level warehouses. As I mentioned, there's a development in Hong Kong which is like an office tower but here in Singapore, you know, the norm will be 5, 6, 7. I was in a nine-level grade A warehouse just recently. When anyone from Australia has come up and had a look, they said, yeah, okay, this is great, I guess it still kind of works, but it's not as efficient as we would like as a single storey big box. And then we start to talk about the costs and the costs, pardon the pun, they just don't stack up, right, for multi-level. If you're not land constrained, why would you be charging a premium to your occupiers? Or as an occupier, why would you pay a premium for a less efficient warehouse when you still have the option as of now to move out into the suburbs and continue with a single storey? And Anna already mentioned it there, so I don't need to repeat it, there's certain parts of Sydney, for example, where yes, the numbers actually add up and you can make it work but the general sense is it's interesting, it's fascinating, we're not ready and yeah, thanks for the visit but we're not quite going to do it just yet.
Anna Maras
When I look at it from our Ascent on Bourke development, Kathryn, and we've got to get you down there sometime. But that was 90% pre committed prior to practical completion. It's on the corner of Gardiners Road and Bourke Road in Alexandria, so South Sydney. And there's three things that really worked in concert to drive demand for us. We have excellent access to both the existing and future infrastructure nodes and major motorways. Meaning that you can transport goods from Western Sydney via the WestConnex motorway that's just 100 metres from the site, right. You can get from Western Sydney to Alexandria in under 25 minutes making it a really excellent spoke location. So, when I talked about those consumer staple occupiers, you've got Coles as an example, having their fulfilment centre in Western Sydney, popping their goods onto a truck, transporting that down into their spoke in Alexandria and getting 25,000 pallets per day out the door in vans. The design, if you look at the design it's, you know, and Mick can have a view on this, but we've got nine metre floor to ceiling on both levels. It's got a 36-metre breezeway for all weather loading, and it has a single flow of traffic up that ramp. So that's pretty distinct to other product in the market at the moment. And lastly, we can reach about 50, over 55% of the metropolitan population in under 30 minutes. So, it's excellent for that final mile or FMCG industry sector that's looking to really get its goods out to people in a quick period of time.
Kathryn House
So, we did talk a little about e-commerce earlier and this plays into multi-level as well. But we do still have that online penetration rate which whilst rising is still lagging from a global standpoint. What opportunities does this create in the Australian I&L sector, Anna?
Anna Maras
I find this an absolutely fascinating space Kathryn, because Australia still has a lot of room for e-commerce growth. The next three to four years are likely to unlock a new wave of digital consumption. So that's as speed, convenience and seamless digital experience catch up with our, as in the Australian consumer’s, high expectation. So, it's more than just getting the right package to the right person at the right time. It's actually also about the holistic online experience. If you think about the generations now that are shopping with more Gen Z, I don't, I'm not close to a Gen Z, but with more Gen Z intending to shop online and over 70% of that generation now is shopping via social media. So, I know my social media knows me really well now. It sends me everything I should buy and I..
Kathryn House
It's dangerous!
Anna Maras
But you know, you see, online marketplaces like Amazon, right that now accounts for 40% of the online spend and last year there's a great Australia Post e-commerce report that talks about record online spending last year, growing by 12%. So that was from the previous year. So, I think there's an enormous opportunity. But it's more than just getting that parcel in a quick period of time. It's also about your experience when you are shopping online. So, occupiers that have a true omnichannel fulfillment platform have to know that their online experience is as good as their delivery experience. And then they've got to get a whole lot of other things right like, it has to be green, it has to be quick, has to be cheap. And I'm sure Mick will tell us all about the new entrants to the market expected in the near term as well.
Kathryn House
Yes, there were some really interesting questions at the CBRE event about emerging Chinese e-commerce groups and what impact they could have here. Our Pacific head of I&L leasing described them as the metre long barracuda he hadn't landed yet. Mick, you lived in China for seven years and so you've had some firsthand experience, and you talked a little about how we need to adapt here to accommodate these fast-moving groups. Can you share a few thoughts?
Mick Bowens
Absolutely. But first of all, before I talk about the adaption, I want to share Anna's enthusiasm and fascination with the sector. Because let me give you a little anecdote. One of the first things I did this morning when I was having my morning coffee was I went online and bought something, which might sound like your run of the mill activity for anyone else, but I'm allergic to shopping and I was allergic to online shopping and I've even embraced it because it was the best and easiest thing for me to do to get what I needed. So, if you've got old guys like me who are embracing it, and we still have lots of market penetration to go, I think the sector is just going to continue to boom. Look, people are hooked on it now. Everyone wants their Shein and their Temu and their cheap goods. They want it now and they want as fast as they can get it. That is not going to go away. So, we can talk tariffs, where the product is coming from, going to, maybe trans shipments, that will sort itself out over time, all of that will settle down. But the online e-commerce sector is going to continue to grow. That I will say with confidence. And then when it comes to the Chinese e-commerce growth, look, these platforms have experienced amazing growth especially in their overseas operations. Some of them experience annual growth, growth from what I can see up to about 65% in the overseas markets. One report that I saw recently said that Chinese e-commerce companies have 32 million square metres of space outside of China and more. Don't quote me on that exact number. But long story short, there is a significant amount of warehouse space being taken up overseas by Chinese e-commerce players. So, in terms of adapting to how they work, well, what I shared on the panel was that, you know, some of these companies just didn't exist 10, 15 years ago. They don't have mature corporate real estate teams, and everything is about market share. They've got to grow, grow, grow. So, they've got that tech bubble kind of mentality. Let's just take on space, think about it later. So, you don't get the methodical approach that maybe European and American companies and Australian companies will adapt. You know, very, very rigorous supply chain planning. It's just a case of I need space, I need it now. So as a landlord, as a broker, you've got to adapt your style. It's really a case of speed to market. You've got to be reactive, you've got to present solutions, you've got to be ready to negotiate very, very quickly. I've seen and I've heard stories of Chinese e-commerce players turning up in a market on a Monday, look at some spaces by Friday, heads of terms are agreed. That seems insane in a market like Australia or Europe, but that's just the way it is now. Does it present risk to someone like Anna? Potentially, if you're concerned that the decision hasn't been thought true completely. However, there's obviously ways and means about, you know, structuring the lease and protecting you as a landlord. But the key thing is speed to market because that's just how they operate. A lot of these businesses are quite immature in terms of their corporate real estate function. And the other thing to note as well, and not to generalise, but I have lived in China for seven years. How these players get treated within China is very beneficial, shall we say, to them. So, they're used to getting great deals, great incentives within the Chinese domestic market. So, there's a little bit of perhaps been spoiled. And now we're going overseas. We expect the same level of reaction, same level of service when they're expanding overseas. But do you want to capture this business? Absolutely. And I did love Mike O’Neill's barracuda. His description, a metre long barracuda. Yeah. So that's my take on that sector.
Kathryn House
Are you seeing any activity yet, Anna, in that sector?
Anna Maras
Look what Mick is talking to. And again, Kathryn, we came off kind of the highs of COVID where I think if you looked at leasing activity in that period, retail trade accounted for I think almost 40% of transactions. We're not seeing a great depth of demand, although there are a few groups and Mick's kind of mentioned some of those names, that is starting to show some green shoots. And I think when it comes to things like covenant strength, at Charter Hall, we are pretty driven by investment grade tenant covenants. But I think you'd obviously be happy to talk to those tenants that will come on Monday and sign by Friday.
Kathryn House
Yes, I think everyone would love that.
Mick Bowens
And I should probably clarify Anna and Kathryn. Look, a lot of the benefit of this expansion will be seen in Europe. I've spoken to major landlords in Europe on my recent trip there and they're saying 30, 40% of their portfolio is taken up by Chinese players. As Anna said, look, we're probably not going to see that level for quite some time, if ever. But even if it's 10%, 15% of your portfolio, you're still going to want to capture it. So, it's probably not as lucrative for Australia as a country, as a region, as perhaps Europe or maybe the U.S.
Kathryn House
So, you touched briefly on tariffs, Mick, and maybe we are running out a bit of time here, but you and Anna had some similar views on how you see tariffs impacting the I&L sector. And Mick, you said it could actually create more collaboration between Southeast Asia and Australia. Can you talk us through that?
Mick Bowens
Yes, and look, I'll try to keep it short. My summary on that is I think the tariff approach is, and this is a bit controversial, I think the US are shooting themselves in the foot because from what I'm seeing on the ground is, countries, markets pivoting more towards the inter region business within Asia, Asia Pacific. And so, I think there's going to be a lot of benefit for more collaboration between China, Southeast Asia, Australia, and this enter Asia business, and Asia and Europe business.
Anna Maras
Well, Kathryn, I completely agree with Mick. A few things. I think we're pretty well positioned. We have the lowest economic risk score globally and we've got the second lowest exposure to US policy changes globally. So, we think direct hit to GDP is forecasted at about 0.1% and only 5% of Australian exports go to the US Kathryn, you can imagine the investor and internal chat around what is the impact? Anna, tell me, because I'm out there talking to our customers every single day, and exactly what Mick has described is playing out within their business. So, you're seeing exports to China in some case grow exponentially. And some of the figures I've heard is by 50 or 60%, as China has decided to effectively stop trade or stop importing from the US. A bit of a tit tat to tariff effectively. And it's been a positive impact to those exporters who are, you know, in this case it was a meat producer, in fact pork. Exponential growth, 60% growth to China, right. So, there is that positive outcome. I think the more macro is that there is volatility in the market, but a lot of our customers are saying, hey, we're passing on that cost of goods anyway down the line. So, it's more probably that macro market volatility that we need to watch. And did you get your letter in the mail around what your tariff is?
Kathryn House
Yes. Well, let's just finish off with the same question that we finished off with at the CBRE event recently, which is if you were to have $100 million, where would you invest it? Anna, give us your thoughts.
Anna Maras
Thoughts, Kathryn? I think that my response is a little bit more generic than we would like it, but I think we're obviously capitally aligned. We're looking for pretty dislocated markets. Charter Hall is very prime product, close to good infrastructure, high underlying land value. I think we stick to our knitting, we know what works for us. We've got a real core focus on investment grade tenant covenants and in really resilient industry sectors. So, I think I'd go there. But I like Mick's. If he had $100 mil, he wouldn't be here today.
Kathryn House
Yes, well, also I'm going to give you a bit more leeway this time, Mick, because you know, you had to answer to Australia, and I think your response was to follow population growth. But if you had $100 million to invest anywhere globally, where would it be? Where's that pot of gold at the end of the rainbow?
Mick Bowens
Look, there's no secret I'm very bullish on China. I just think as a market it's going to come back, it will continue to grow, it's going to be resilient. So as a geography, I would point towards there. And interestingly, when we did a panel session in Europe, the global head of one of the world's biggest investment funds said to me over a beer the night before the panel, you better not badmouth China. You need to be bullish on China because that's where I plan on spending some money. So at least one person agrees with me. But as a geography, it would be China, as a sector data centres and/or life science. China now has more patents under process and they're building so much life science and lab space now. It’s not my standard logistics that I'm into, business park space. I just think data centres. When China catches up on chip manufacturing, it will be focused quite a bit on China. That's a bit of a bold prediction. Could go either way, but certainly life science. I know that they're massively investing in R&D for new drugs, new treatments, new technology for life science, so that's going to see a lot of build in the life science sector within China.
Kathryn House
Well, I like bold predictions, so thank you for those, Mick. And thanks for joining us in Sydney recently. It was great to have you.
Mick Bowens
No problem.
Kathryn House
And Anna, so great to meet you recently and really appreciate all your market intel as well.
Anna Maras
Appreciate it, Kathryn.
Kathryn House
Thank you to our listeners. Thanks for tuning in. And if you want to read more about our latest Australian I&L research, there's a link in our show notes. Also, make sure to subscribe to Talking Property so you don't miss some of our upcoming episodes on luxury retail, self-storage, and workspaces of the future. You can also reach me with future podcast ideas by emailing
[email protected]. Until next time.
