02 STRUCTURAL & EMERGING DEMAND DRIVERS
CUSHMAN & WAKEFIELD | 14
AUSTRALIA'S OCCUPIER MARKET OUTLOOK
AI: TRANSFORMATION OR INCREMENTAL CHANGE? AI is unlikely to change warehouse demand requirements overnight, but its effect on productivity and automation could progressively change how occupiers use space.
In the near term, AI is most likely to improve decisions within existing networks. Better forecasting, inventory positioning and routing could help occupiers increase throughput and make more effective use of current capacity. As AI is combined with robotics and warehouse automation, the property implications become more pronounced. Facilities will need sufficient power and connectivity, alongside layouts that support higher volumes of goods moving through the building. Greater efficiency will not necessarily reduce demand for industrial space. Higher throughput could increase the value of well-located, capable facilities, while more flexible inventory flows may eventually change where occupiers need space. Cushman & Wakefield's recent AI Impact Study provides an in-depth analysis of four different scenarios and their impact on the sector.
HOW AI CAN INFLUENCE WAREHOUSE DEMAND
HOW COULD THE IMPACT EVOLVE? NEAR TERM AI-assisted operations Forecasting, routing, inventory positioning and labour optimisation improve how occupiers use existing networks and capacity.
Higher throughput AI-enabled forecasting, inventory
Demand implication Greater need for high-throughput facilities with sufficient docks, yards, staging, circulation and sortation capacity.
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management and automation could allow occupiers to process greater volumes through their logistics networks.
PROPERTY NEEDS
Staging capacity Sortation capacity Efficient circulation
More docks
Larger yards
USE SPACE BETTER
MEDIUM TERM Automation at scale Greater adoption of robotics and automated systems increases requirements for power, connectivity and building capability.
More dynamic networks Real-time optimisation could allow inventory and freight flows to be continually redirected across an occupier's network as demand changes.
Demand implication Strategic network locations become more valuable, particularly facilities providing access to multiple customers, markets and transport routes.
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LOCATION NEEDS
Customer reach
Transport access
Market proximity
Optionality
REQUIRE MORE CAPABLE SPACE
LONG TERM Network transformation More dynamic inventory positioning, capacity utilisation and network optimisation, potentially changing where and how occupiers require space.
Greater automation AI could accelerate the adoption and sophistication of robotics, automated storage and retrieval, and other warehouse technologies.
Demand implication Demand increasingly favours automation- ready facilities with sufficient power, connectivity, clear height, floor performance and flexibility.
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BUILDING NEEDS
Power & connectivity
Clear height
Floor performance
Flexibility
POTENTIALLY RESHAPE NETWORKS
Source: Cushman & Wakefield Research
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