[+] The East Coast Freight Bonanza: Opportunities in Growth Corridors

James Baulderstone is unashamedly passionate about trucks, trains and the freight they carry. “Freight is life,” he tells his audience. The audience—members of a Property Council of Australia meeting in Melbourne—laugh as one. But Baulderstone is only half joking. Freight is life, and the backbone of the Australian economy, he reiterates. And he has the statistics to prove it. Freight and logistics employ 1.2 million people in Australia who collectively help move 3.7 billion tonnes of product a year. That represents 8.6 per cent of the country gross domestic product. And it’s set to grow by 26 per cent by 2050. As chief executive of federal government’s National Intermodal, Baulderstone’s job is to oversee the country’s critical logistics infrastructure and prepare for the explosive growth just around the corner. Australia’s online spend last year was about $64 billion—up 23 per cent from the year before—and all amid a global pandemic, a war in Europe and what Baulderstone calls “China being difficult”. “And that’s really put a focus on industrial land,” he says. “It has never been more important.” Industrial floor space demands growing Colliers, the real estate services and investment manager, says suppliers are now taking 5-20 per cent more warehouse space to buffer against the kinds of global disruptions that threatened supply chains in the past three years. In fact, Colliers argues online retail alone will need an extra 520,000sq m of storage space each year. National Intermodal has a single shareholder—the Australian Government. It was set up to look at both current operations and future development of open access intermodal precincts along the country’s eastern seaboard. In short, how to get as much freight around the country in as short a possible time. ▲ Victoria’s newest intermodal freight terminal north of Melbourne (main picture) will be able to handle 1800m-long, double-stacked freight trains. Those intermodal precincts are designed to co-locate transport modes, such as rail, road and shipping with large-scale warehouse solutions and delivery routes. Very large scale. When completed, Moorebank Intermodal Precinct for example—32km south-west of Sydney and covering 240ha—will be about the size of the Sydney’s central business district, stretching from Circular Quay to Central Station. Billion-dollar co-located warehouse developments run hot Industrial developer Logos is leading a consortium—including Australian Super, AXA IM Alts, Canada’s Ivanhoé Cambridge and TCorp—in a deal with Qube for the giant facility. Ultimately, the decade-long development will create 850,000sq m of warehousing and two intermodal transport terminals. Those will be integrated with the Import Export (IMEX) rail shuttle that runs non-stop between Port Botany and Moorebank on the dedicated Southern Sydney Freight Line (SSFL). At a time of severe shortages of gazetted industrial land in NSW and Victoria, tenants have flocked to take up early space in what will be the biggest freight and logistics terminal in the country. Purpose-built warehousing facilities are already completed for Catch, Caesarstone, Mainfreight and Qube Logistics. Critically, according to Baulderstone, Woolworths—the country’s biggest supermarket chain—was a foundation customer at Moorebank “who came in early and are spending over a billion dollars on this facility as we speak” on regional and national distribution centres. “This is where industrial land and the logistics sector really come together,” Baulderstone says. “This is where the co-location of warehousing, the ability of the trucks to come and use that last mile, and the ability to retrofit and to actually put in place renewable energy zones inside a logistics precinct is really important.” And it’s about rail. ▲ National Intermodal’s James Baulderstone: He says freight by road produces 16 times more carbon emissions than freight by rail. At full capacity, the Moorebank Logistics Park will cut more than 3000 heavy truck movements from Sydney’s roads each day, in turn reducing truck emissions by more than 110,000 tonnes of carbon dioxide (equivalent), each year. Rail, which produces about 16 times less carbon, will pick up the slack. Baulderstone says in the past 30 years, the amount of freight moving across the country has tripled, but freight delivered by road has taken almost all of that growth. “Over that period of time the share of the market that rail moves has gone from 30 per cent to less than 10 per cent,” he said. But the real problem, he says, is the forecast growth in Australia’s freight. “We’re talking about 1.4 million containers moving up and down the east coast of Australia. “Our roads and truck networks cannot handle this much freight and we’ve got to get better and more efficient at managing this volume that is coming at us.” Governments, both federal and state, as well as National Intermodal are betting on the multibillion-dollar, 1727-km-long Inland Rail project—which will connect the ports of Melbourne and Brisbane, as well as the Sydney-Perth rail corridor—to solve the problem. Victorian freight project to dwarf Moorebank Despite a scathing review of the rail project thus far, in June this year National Intermodal completed a deal to buy a sprawling 1100ha property in Beveridge, 40km north of Melbourne. If the Moorebank’s boast is it’s the biggest intermodal freight terminal in the country, it won’t be for long. ▲ Moorebank Intermodal Precinct. The freight and logistics hub is just 32km south-west of Sydney and covers 240 hectares. Source: LOGOS Melbourne is the freight capital of the country and the Beveridge Intermodal Precinct will reflect that. Two-and-a-half times the size of Moorebank, Beveridge will have 600ha of developable land, upon which there is the possibility of up to two million square metres of warehousing. The rail journey for freight between Melbourne and Brisbane will be under 24 hours—12 hours less than freight by road. But most importantly, Beveridge will be the only Victorian intermodal capable of handling 1800m-long, double-stacked freight trains. Baulderstone predicts Beveridge could be fully energy sufficient. He says rooftop solar on a facility that size, together with battery storage, can power all the terminal operations, all the warehouse tenants and electric trucks, as well as electric locomotives for port shuttles. In fact, Beveridge’s solar capacity—estimated about 200MW—would currently make it the six biggest solar farm in Australia. Growth opportunity for northern corridor development But the big opportunities, says Urbis director Eleni Roussos, will come from the 6800 direct jobs the facility will create, with another 20,000 indirect jobs expected. “This is going to sow the seeds of a shift into the that northern corridor,” says the urban planner, who specialises in the industrial sector. “The west has been the centre of industrial and logistics land in Victoria for a long period of time. “It’s where the supply has been. It’s got easy connections to the port, it’s got proximity to staff, and flat land at a good price. It had all the right metrics and criteria to develop but it’s very close to reaching its end. ▲ Urbis director Eleni Roussos. The urban planner says the Beveridge Intermodal Precinct will create opportunities in Melbourne’s northern corridor. “And you’ll well know the land supply issues that we’re facing from a state perspective, and specifically in that western corridor, and I suspect that the intermodal in the north will help move from everyone looking in the west to now starting to look to the north.” Ripple effect in ‘quantum of development’ Roussos says once there is the quantum of development, particularly given the big plays from large tenant types, there will be the opportunity for new campus-style developments. “Someone might want a head office out there as a part of their warehouse,” she says. “And whether that’s a bespoke office within the facility itself, or whether that’s a custom-built office facility with multiple tenants … and then there’s all sorts of synergies that are around that. “Would there be a hotel there for people that are flying in for the day or the week to do their board meetings and the like, coming in from overseas or from interstate or wherever? “This is something that you could certainly anticipate in the future and remember we’ve got a significant residential corridor up there as well. “So there’s very good access to employment.” Roussos says there is now a realisation Australia can’t rely on the rest of the world for everything. “Now we’ve got to start doing a few things for ourselves and hopefully that means we’ll see a bit of a change in the way we manufacture, produce and move our goods,” she says. “We need a bit more self-reliance, I think.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. 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[+] The East Coast Freight Bonanza: Opportunities in Growth Corridors

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