How to Find and Evaluate Industrial Real Estate Investment Opportunities

At a glance

• Search for properties on industrial real estate websites like Just Commercial. Filter by location, price, and property type to find suitable options.
• Work with an experienced agent who knows the market and has access to off-market deals, giving you a competitive edge.
• Look for properties near transportation hubs such as highways, ports, and railways. Proximity to workers and public transit also boosts tenant demand.
• Check zoning, building condition, and lease terms. Ensure the property is zoned for industrial use, assess its structural integrity, and review the lease and tenant financials.

 

Australia’s industrial real estate sector is experiencing robust expansion, driven by the rise of e-commerce, evolving supply chains, and ongoing infrastructure development. With demand for warehouses booming and vacancy rates at record lows in key markets like Melbourne, Sydney, and Brisbane, savvy investors are turning their attention to the asset class.

Industrial property, a once-niche segment of the market, has emerged as one of the most in-demand commercial real estate classes. But how do you discover the greatest industrial properties, and most importantly, how do you evaluate them effectively for the maximum returns?

In this article, we’ll explain an elaborate approach to finding and assessing industrial real estate investment opportunities.

 

Why Invest in Industrial Real Estate?

 

Before finding and evaluating industrial real estate, let’s first understand why invest in them in the first place. Industrial property offers an appealing combination of safe income, long-term capital growth, and relatively low maintenance compared to other commercial properties.

One of the main draws is the industry’s resilient demand. The current boom in logistics, warehousing, and last-mile delivery services has significantly increased tenant demand for industrial space. Investors are also attracted by the favourable yields, which tend to outperform returns on retail or office properties.

Low vacancy rates in key industrial hubs have pushed rents higher, still boosting investment returns. Moreover, industrial assets can serve as a hedge against inflation, especially if lease agreements include yearly rental increases, to preserve purchasing power over the medium to long term.

 

How to Find Industrial Real Estate For Sale?

 

The quest for the perfect investment opportunity begins with an active, educated mindset. It’s as easy as working with industrial property sites such as Just Commercial. Such sites offer countless listings that can be narrowed down by area, price, type of property, and others. However, the best deals get taken quickly, so be ready to make a move sooner rather than later.

Engaging an experienced industrial real estate agent can substantially enhance your search. Such agents have their fingers on the market’s pulse, tenant requirements, prices, and zoning. Even more importantly, seasoned agents typically get early warning of new listings, which may provide an advantage over competitors.

In addition to public listings, consider networking for off-market deals. Many quality properties are never listed and are sold via private networks. Building personal relationships with agents, brokers, developers, and other investors can provide access to these private deals.

Monitoring infrastructure development and growth corridors is another tried-and-tested method. Being close to new roads, ports, intermodal freight terminals, and industrial estates raises land values. Government reports of infrastructure spending and rezoning proposals can help identify up-and-coming areas with sound investment potential.

 

How to Evaluate Industrial Properties?

 

Once you have a prospective industrial property, analysis is critical. First, consider the location and its accessibility. Industrial properties close to major transportation networks, such as highways, ports, airports, or rail links, tend to be more desirable. Proximity to the surrounding workforce, truck access convenience, and proximity to public transit also play an important role in tenant desirability and long-term value.

Then, check the zoning ordinance, planning overlays, and the building’s condition. Make sure the property is zoned for industrial activity and find out if there are any environmental or planning constraints that could restrict operations or development opportunities. Verify the building’s structural soundness, such as ceiling height, floor load capacity, and conformity to current safety and accessibility standards.

If the property is tenanted, review the lease terms and the quality of the tenant. The most critical factors are the lease term, rent review provisions, who pays outgoings, and the tenant’s financial standing. A quality tenant on a long lease can significantly reduce risk and produce stable income.

You should also know the financials. The net yield, net operating income (NOI), capitalisation rate (cap rate), and internal rate of return (IRR) are the key performance indicators that will enable you to establish the property’s income potential and long-term value. These indicators provide you with a clear picture of how good the investment will be at achieving your financial goals.

Finally, legal and environmental due diligence must be conducted. Bring in legal professionals to review title, contracts, and encumbrances that may affect the transaction. Also, conduct environmental testing, especially for older industrial properties, for contamination or other legal issues that may lead to future liabilities.

 

Find Your Next Investment with Just Commercial

 

Industrial real estate has evolved from a niche investment to one of the most stable and rewarding asset classes in the Australian commercial property market. Robust tenant demand, limited supply, and attractive yields have never made it a more opportune time to take your next step. Being highly informed and acting swiftly are essential to acquiring high-performing assets in such a competitive environment.

If you’re ready to capitalise on the potential in industrial real estate, Just Commercial is here to help. Our experts in Industrial Property specialise in bringing investors together with high-potential, strategically located industrial assets right across Melbourne.

From that very first warehouse to the growth of an established portfolio, browse our listings today and let our professionals guide you toward your next investment success. Get in touch with us today!