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How Amazon is changing the commercial real estate space

By Greg Bell

Unless you’ve been off the grid for the entirety of the 21st century, you’re surely well aware of the unprecedented effects that Amazon has had on the global retail industry. But what’s also become clear, in these last years leading up to the 2020s, is that Amazon is now set to take up equivalent space in a number of totally different sectors, from film production to food distribution.

But perhaps the biggest of all these new “Amazon effects” is the huge role that the online retailer has come to play in the global real estate market. And that’s being illustrated right here and right now as Amazon takes its latest steps to establish a physical presence across Australia.

Moving in for multiple purposes

Amazon’s effect on the real estate market will be clear to anyone living in a major city right now: You see pop-ups operated by the retailer everywhere, with promises of more physical locations to come (just last month for Black Friday, these Amazon Hubs were set up in malls and retailers across the country).

But the promise of future “Amazon Stores” is hardly the only thing having a ripple effect on the real estate market, as the e-commerce giant is also looking to buy up warehouses and other industrial spaces in certain locations across the country, to more efficiently distribute its goods.

Further demand for industrial properties and warehouse spaces

One recent report noted that Amazon’s size and location requirements are so large that they are ending up in competition with luxury residential developers. But while the company has two distribution centres operating within Australia at the moment, it’s currently planning to open more, ensuring that competition for these properties will only keep growing – with prices only going up as local property owners and developers compete to keep up with the international giant.

With increased competition comes increased property value

Even without the Amazon expansion, the national market for industrial and commercial property has rarely been hotter. And so the larger role that Amazon has come to play in the market has only increased the value of real estate which might fit its purposes. Ironically, the biggest effect had by the retailer known for slashing prices has been to bring them up even higher.

For a listing of commercial property currently for sale in the City of Gold Coast, and further information on the industrial real estate market as it currently stands, please contact the team at Ray White Surfers Paradise.

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