03 CHANGING OCCUPIER BEHAVIOUR
CUSHMAN & WAKEFIELD | 21
AUSTRALIA'S OCCUPIER MARKET OUTLOOK
CONSOLIDATION REMAINS A KEY STRATEGY As occupiers focus on network efficiency, consolidation can reduce operational duplication while creating a more scalable platform for future growth.
Illustrative consolidation outcomes: Capacity growth without more floorspace
Consolidation remains a key strategy for occupiers seeking to optimise their property networks and improve operational efficiency. By combining operations into fewer, higher-capacity facilities, occupiers can reduce duplication across their networks while creating a more efficient platform for current requirements and future growth. Modern facilities can strengthen the consolidation opportunity through higher clear heights, improved building design
AFTER: CONSOLIDATED NETWORK 1 modern, higher-capacity facility
BEFORE: FRAGMENTED NETWORK 3 facilities, higher duplication
SCENARIO OUTCOMES
No change in floor area 15,000 to 15,000 sqm Cost base remains similar
0%
Pallet capacity increase 18,000 to 22,500
Site A 6,000 sqm $240/sqm
Site B 5,000 sqm $255/sqm
Site C 4,000 sqm $270/sqm
25%
15,000 sqm $240/sqm
rent per pallet position* $211 to $160
-24%
Total floor area
Pallet positions*
Rent per pallet position $211
22,500+ pallet positions*
15,000 sqm
18,000
and greater operational capacity. Depending on the requirement,
operating locations Capacity for current needs and future growth
3 to 1
consolidation may result in a smaller, similar or larger facility. The objective is not necessarily to reduce space, but to combine operations into a more efficient network while providing capacity for future growth.
Rent per pallet position $160
Multiple leases | Duplicated inventory, operating areas and transport | Complex network
ADDITIONAL BENEFITS OF CONSOLIDATION (BEYOND PROPERTY COSTS)
Inventory efficiency Less duplicated inventory across multiple sites, releasing working capital.
Operational efficiency Reduced duplication of labour, equipment and site overheads.
Network efficiency Simpler inventory flows and fewer inter-facility movements while maintaining service levels.
Environmental outcomes Potential reduction in overall energy use and emissions across the network.
*Pallet positions are illustrative and based on typical stacked racking layouts.
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