New data shows rapid investment in industrial space by pharma/healthcare over last 12 months
New analysis by global supply chain consultancy TMX Transform has found that in the last 12 months alone major healthcare and pharmaceutical client companies have invested in more than 150,000 sqm of new operational property sites, predominately along Australia’s eastern seaboard.
The investment is equivalent to 7.5 Melbourne Cricket Grounds. Another 100,000 square metres of potential property projects may be developed in 2024, with companies finalising business cases now to proceed with their transformation projects. This rapid investment in new industrial space is testament to the resilience of the healthcare and pharmaceutical industries, despite the current volatile economic environment.
At the same time, high operating costs and ageing property facilities are driving many health-related businesses to reassess and transform their supply chains to drive efficiency and productivity gains. But many other consumer industries producing discretionary spending goods, by contrast, are ‘space shedding’ and subleasing space in their warehouses.
Companies investing in the Australian eastern seaboard include:
Essity (consumer health products) which has committed to just under 50,000 sqm of new purpose-built facilities with Charter Hall, in Wacol Queensland (13,572sqm) and Tarneit, Victoria (34,788sqm).
API (consumer pharmaceuticals) which has committed to a 26,292 sqm facility at Berrinba in Queensland. Medical device supplier Device Technologies have opened their new 17,000 sqm facility in northwest Sydney.
Device Technologies (medical devices and supplies) which has practically completed its17,000 sqm facility in Marsden Park, New South Wales.
Probiotec (pharmaceuticals manufacturer) which has committed to a 36,003 sqm facility in Kemps Creek, Sydney.
TMX Director of Property, Jack Moroney, said all investments were along Australia’s Eastern Seaboard because of the need to meet strong demand for efficient and effective pharmaceutical service in the most heavily populated centres.
“All of these projects include a minimum scale build of around 13,000 sqm because pharma businesses need space to hold stock, as many of their products are not ‘discretionary’ but essential,” he said. “Put simply, the consumer health and pharmaceutical sector is driven by the need to hold readily accessible stock in storage to meet fluctuations and potential spikes in consumer demand.”
Several additional customers are now considering their wider network needs in South Australia and Western Australia. Global hygiene and health company Essity’s two new facilities in Queensland and Victoria will transform its supply chain capability, allowing it to commit long-term to its Australian manufacturing plant at Springvale, Victoria, where it recently extended its tenure by 10 years. Essity worked with TMX to determine their optimum future network, design of their future facilities, property procurement, and now project delivery of the new facilities.
“With the support of TMX, we conducted a comprehensive review of our supply chain with the aim of improving customer experience and to support future growth,” Essity CEO Sid Takla said. “This review identified opportunities to consolidate our network and to invest in new technology that will deliver on our stated objective. “After a thorough search process, we are pleased to be partnering with Charter Hall who will deliver two new state-of-the-art storage and distribution centres for our Australian business.”
Charter Hall Industrial & Logistics CEO Richard Stacker said he was proud to be partnering with Essity to deliver two new, state-of-the-art storage and distribution centres and support their supply chain transformation across the Eastern Seaboard.
“Our strategically located, flexible and sustainable logistics hubs will help them achieve efficiencies for their business and for consumers, and we look forward to working closely to help them achieve these outcomes,” Mr Stacker said.
