Page 40 - Food&Drink Magazine May 2022

PLANT DESIGN & FITOUT
The post-Covid reality for industrial realty
The combination of greater funding, technological advancements, and impacts of the pandemic are directly impacting local manufacturing, which is flowing onto industrial real estate. Michael Raymond from LPC explains what this means for business.
AUSTRALIA has had a proud manufacturing history. In fact, cities were established and thrived off the back of manufacturing plants in the 1950s and 60s. They provided employment for many of Australia’s new arrivals leaving war savaged Europe.
However, by the 1970s Asia began to emerge as a more cost effective solution for manufacturers. This led to the off-shoring of manufacturing, which had traditionally been undertaken domestically. Sadly, this trend resulted in the closure of a number of Australian institutions.
Could this be about to change? There are two strong factors which indicate that this might be the case.
Firstly, the manufacturing sector has embraced technology and innovation.
While not necessarily a recent development, technological advancements are becoming more cost effective,
enabling manufacturers to adopt new processes.
Artificial Intelligence (AI), robotics, and automation are now becoming more prevalent and perhaps even the norm rather than the exception. Their adoption has led to Australian manufacturers becoming more cost effective.
The second factor is the impact and effects of Covid.
enter the “new normal”. Coupled with the more
cost-effective landscape, is there an opportunity for Australian manufacturers to consider onshoring?
Indeed, the Federal Government has identified this and through its Modern Manufacturing Initiative is providing grants to companies looking to grow and expand
40 | Food&Drink business | May 2022 | www.foodanddrinkbusiness.com.au
“ The Australian industrial real estate sector is booming. There has never been a more buoyant period in history.”
The pandemic caused significant disruption to international supply chains, highlighting to those reliant upon overseas production facilities how quickly everything could go wrong.
The backlog of product continues to be a problem as we emerge from the pandemic and
their domestic capabilities. For LPC, the question is,
where does real estate fit in the new manufacturing world?
The Australian industrial real estate sector is booming. There has never been a more buoyant period in history. Industrial land values across Australia have increased significantly