CAROLYN CUMMINS June 09, 2012
Special deliveries … courier business DHL is one of many companies to have consolidated operations in search of greater efficiency.
CONSOLIDATION of multiple warehouses is becoming increasingly common in the industrial sector as companies look to make operations more efficient.
The trend is leading to a rise in demand for properties built specifically for the business rather than a speculative development.
An associate director of industrial for Colliers International, Marcel Elias, said consolidating multiple sites often reduced overheads and increased warehousing efficiencies.
''A recent example is by Pro-Pac Packaging Limited, which has leased an 11,000-square-metre facility in Wetherill Park, in Sydney's west,'' Mr Elias said. ''Pro-Pac will be combining several of their industrial packaging operations into the single facility. The initiative will cost them about $1.8 million.
''But the directors believe it will not only provide for greater warehousing efficiencies but also provide essential infrastructure for continuing growth of the group.''
Mr Elias said Pro-Pac undertook the same initiative this year in Yatala, Queensland, and Wingfield, South Australia, and was looking at Western Australia next year.
He said other companies that had followed this model included Shop Supplies, which had moved from three sites to one in Condell Park, and courier business DHL, which had also adopted a consolidation model nationally.
''In line with preliminary inquiries we have received, we expect site consolidation exercises to be far more frequent in the coming 24 months,'' Mr Elias said.
iNova Pharmaceuticals was one of the first this year to consolidate, after selling its long-held freehold Thornleigh iNova Centre.
In conjunction with the Project Control Group, iNova now operates in new leasehold premises in Help Street, Chatswood.
The chief executive of iNova, Andrew Howden, said the group's core competence was sales, marketing and providing valued pharmaceuticals to patients and consumers in the Asia-Pacific region.
''This focus has required us to make some important decisions on our supply chain and business structure in the region, including relocating our manufacturing to more efficient sites in Australia and offshore,'' he said.
''PCG, run by Simon Gunnis, successfully managed our corporate real estate strategy, which included selling our iNova Centre through Jones Lang LaSalle, establishing our workplace needs and sourcing the optimum Sydney location for our new leasehold corporate headquarters.''
The move to consolidate comes as the outlook for the Australian industrial market remains in a gradual upswing, according to the Australian head of industrial and NSW managing director at Jones Lang LaSalle, Michael Fenton.
He said investors remained focused on large, well-located, prime-grade assets. ''In Sydney, the market offers investors a deep pool of assets and exposure to major corporate occupiers that tick all the boxes for industrial investors seeking quality properties at attractive yields.''