Online shopping boom transforming Australian property landscape as Amazon opens first robotics fulfilment centre

The robots are no longer coming. They are here in Amazon’s latest Sydney warehouse. But the e-commerce giant is not alone in riding the boom.

Amazon has opened its first robotics fulfillment centre in Australia with Prime Minister Scott Morrison in attendance. Picture: Jeremy Piper/NCA NewsWire

If any more evidence was needed that the e-commerce boom is transforming the property landscape it came on Wednesday.

The ubiquitous Amazon, founded by Jeff Bezos in 1994, opened its first robotics fulfilment centre in the country with Prime Minister Scott Morrison in attendance.

The US behemoth has changed the way both retail and logistics are done in Australia and has set few limits to its activities offshore, with plans to now launch broadband-providing satellites.

But locally it is all about serving a growing army of converts to the Amazon way of shopping.

Beyond the immediate benefit of creating more than 1,500 jobs in the electoral battle ground of western Sydney, the new roboticised facility will have its own impact on the country’s retailers and e-tailers.

The massive centre is the first in the southern hemisphere and is the largest warehouse ever built in Australia. It spans 200,000sq m across four levels – around the land size of Taronga Zoo or 24 rugby league fields – and can house up to 20 million of the smaller items sold on Amazon.com.au including jewellery, books, electronics, pantry items and toys.

It is Amazon’s second such centre in western Sydney, and sixth in Australia, and will house 1,500 Amazon workers alongside the much hyped robots, which dramatically improve packing speeds.

“The opening of our first robotics fulfilment centre is a huge milestone for Amazon Australia, marking our continuous growth and investment in this country,” Amazon Australia director of operations Craig Fuller said.

Elsewhere in Sydney, building has kicked off on the new Interstate Intermodal Terminal at Moorebank Logistics Park in Sydney’s southwest.

Minister for Communications, Urban Infrastructure, Cities Paul Fletcher officiated as building started on the first of four huge interconnected terminals.

These are expected to overhaul supply chains and drive freight efficiencies along the eastern seaboard with trucks to come off crowded roads.

The terminal is part of an industry joint venture model between the National Intermodal Corporation, the listed Qube, and industrial property specialist Logos.

The Moorebank Logistics Park will span 850,000sq m of modern warehousing and facilities which is another bet on e-commerce gains being locked in.

Big capital is chasing e-commerce based property deals. They are of big scale so foreign money is teaming with local managers.

On Wednesday, the listed GPT doubled its logistics venture with Canada’s QuadReal and will roll out $2bn worth of warehouses.

The GPT deal will work with QuadReal to grow their holdings by chasing and developing more prime logistics assets.

The additional commitment follows the successful launch of the initial $1bn joint venture in February 2021 and adds to the wave of capital after top warehouses.

In just under twelve months, the joint venture has invested in seven developments, four of which are already 75 per cent pre-leased in a sign of the strong demand in the market. Once completed the projects will span 315,000sq m putting, making the portfolio one of the country’s largest.

GPT head of logistics Chris Davis said the pair were committed to delivering and investing in quality assets.

“GPT look forward to further progressing the partnership as we upsize the capital commitment to $2bn,” he said.

At the same time relative newcomer Gateway Capital won backing from US giant Invesco to develop $1bn worth of prime logistics facilities.

The market is running hot on the back of the e-commerce boom and Gateway has acquired its first asset in the Sydney suburb of Revesby, snapping up a 5 hectare site that it can redevelop into a prime infill logistics asset.

Gateway Capital is hitting the market with a fresh investment strategy focused on urban infill opportunities on the east coast.

Targeting $1bn of assets, the new strategy has been established with capital from Invesco who share the investment objective of creating core assets in strong locations through an active management approach.

With a long-term investment strategy over ten years, Gateway Capital has flexibility to seek opportunities that provide a medium-term redevelopment plan to create these core assets.

In launching the strategy, Gateway Capital has acquired 61 Milperra Road, Revesby, fronting Milperra Road, the main thoroughfare through the precinct. The site is occupied by Infrabuild but medium-term it could be turned into a $300m multi-level logistics estate.

The deal was brokered by Trent Gallagher of Colliers and Invesco was introduced to Gateway Capital by Tony Iuliano of JLL.

Gateway Capital chief executive Stuart Dawes said the company believed that the long-dated investment period provides flexibility in the style of deals that it can source.

“With a well-defined strategy and strong capital support, we have a solid pipeline of opportunities to continue the growth of the portfolio over the coming months,” he said.

All this activity points to the locking in the dramatic shift in the market where warehouses are now being rated as more attractive than even the best shopping centre in the country.

With their rising incomes they are likely to keep producing on the back of the longer term economic shift.