Australia’s logistics occupiers prioritise cost-savings while taking a measured approach to expansion

Cost pressures are driving Australia’s logistics occupiers to adopt a cautious approach to expansion and growth though more than half expect to increase their logistics footprint in the next three to five years, a new CBRE survey shows.

CBRE’s Australia Logistics Occupier Survey features insights on business outlook, growth plans, strategic opportunities and challenges in the market.

The survey found Australia’s logistics market continues to show resilience despite global economic headwinds and evolving trade dynamics, with Australian logistics occupiers focused on cost-saving initiatives, measured expansion, and strengthening supply chain resilience.

The survey shows business sentiment among Australian logistics occupiers is cautious with 79% expecting business performance to improve (50% moderately and 29% significantly) over the next two years.

CBRE’s Head of Industrial & Logistics, Data Centre Research Australia Sass Jalili said, “Occupier sentiment suggests continued long-term expansion requirements in the Australian market. Australia recorded a 25% net expansion interest, reflecting a stable approach among occupiers. The market continues to benefit from its mature infrastructure, transparent regulatory environment, and strategic location for servicing both domestic and regional demand. Expansion interest is largely driven by business upgrading existing facilities and capitalising on established networks. We anticipated Australia will continue to play a critical role as a strategic logistics hub, particularly for multinationals balancing risk across geographies.”

Cost pressures are driving operational recalibration with 71 % of occupiers citing transportation and labour as their top cost concerns. Rising freight, labour and land costs are triggering portfolio reassessments and rent-sensitive decisions while expansion is being delayed as occupiers adopt a more cautious approach to growth.

The survey found 66% of occupiers expect to increase their logistics footprint over the next three to five years with expansion plans focused on the Eastern seaboard cities with preference for leasing modern facilities. This growth reflects occupiers’ desire for operational flexibility, favourable lease terms and proximity to end-customers.

When it comes to relocation decisions. 92% of respondents cite securing better lease terms as the leading factor for relocation, with lease flexibility and rental savings top of mind. As well as cost savings, occupiers are also prioritising consolidating sites to streamline operations (54%) and better connectivity to transport networks (54%).