Supply Chain Report - Logistics Association of Australia

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S u p p l y C h a i n R e p o r t 2 0 1 0 Significant Infrastructure Upgrade 2010-11: Ports and ICT Ports Melbourne Port Expansion • After the completion of the channel deepening project in November 2009, the Victorian government started seeking industry views and options to meet the future trade volume at the port, which are projected to double by 2020. • The submission closed in September 2010. The Port of Melbourne Authority is preparing advice for the government based on the analysis of these submissions. Port Botany Expansion • The Port Botany $1 billion expansion project, which began the planning process in 2001, now progresses into the third year of construction. • The first five berths are expected to be available for trade in 2012. Darwin Port Expansion • Federal government has agreed to allocate $50 million to the expansion of the Port of Darwin. • The project is expected to commence in 2010-11, and once completed will double the existing capacity and reduce export costs. National Broadband Network • The National Broadband Network is the largest infrastructure project the nation has ever undertaken, and is expected to cost $47 billion over eight years. • The network is the Fibre to the Premises (FTTP), which will deliver an internet speed of 100 Mbps to more than 90% of households and businesses. • The network will be designed, built and operated at the wholesale level by NBN Co Limited, a company established by the government in 2009. Latest Status • A trial roll out was lunched in Tasmanian towns (Smithton, Scottsdale and Midway Point) in August 2010. • Wholesaler prices have not been set. The price guide given by the Minister is to be around $20–30 per month for an internet-only service, and $30–35 for internet plus voice services. • Currently, carriers can access the network at a flat rate of $300 per premise. • A further five trial sites in NSW, VIC, and QLD commenced construction in July 2010. • An additional 14 trial sites have been announced in all states and the construction will be commenced in Quarter 2 of 2011. [DBCDE,12] Warehouse Availability and Trends: Demand • On the demand side, in 2009-10 there appeared to be concern over the stability of economic recovery. Warehouse Availability and Trends: Demand Region 2009-2010 Demand Condition and Outlook Demand Forecast • Issues of uncertainty in the European and US markets and the introduction of a resource tax have slowed down decision-making in businesses. • It is noted that Kmart has taken the opportunity to consolidate into one DC north of Melbourne, in order to lower costs. • Demand is expected to strengthen given a positive outlook of the economy. Perth Brisbane Adelaide Gold Coast/ Northern NSW Sydney • Demand for larger warehouse remains healthy driven by the resource related sector • Given the anticipated recovery in economic condition, the planned investment by resource sector, and the better employment level, demand is likely to improve. • Demand has overall been improved, although there were times that outlook of the economic recovery were unclear • Future demand is expected to be firm and tighten in 2010-11 provided the lower level of concern over resource tax issue and stability of economic condition • Demand in 2009-10 has been resilient especially for the smaller space (
S u p p l y C h a i n R e p o r t 2 0 1 0 Warehouse Availability and Trends: Supply • Supply remained limited in most areas during 2009-10. • New developments are expected to be seen given the less restricted lending conditions to which investors have begun to adjust. • It is noted that although the availability of secondary warehouses has improved significantly during the crisis, the case is not true for high quality and prime location warehouses. Perth Brisbane Adelaide Warehouse Availability and Trends: Supply Region 2009-2010 Supply Condition and Outlook Supply Forecast • Ongoing lending constraints continued to limit supply in the market • The market still experienced low level of supply stock • Shortage of high quality space is presented in larger warehouse • Now that the investors have taken time to address the credit issues, it is expected that they will re-enter the market. Given the stabilised land price, we can expect not to see less supply • Supply has been quite limited due to a stricter condition impose by financial institutions. This resulted in a higher cost of new developments upfront. • As investors getting adjusted to the new financial condition, supply is expected to continue to be less constrained. • Limited availability of land in the prime locations (inner regions) still confined the development opportunities. • New developments are expected in the pre-commitment leasing group after almost 2 year of quiet period. Gold Coast/ Northern NSW Sydney Melbourne • Supply level was driven higher in 2009 because many occupier was forced to liquidate the asset • However, development activities and new investments are expected to still be limited due to stricter lending practice of the bank. • Lack of high quality property in good locations both for lease and for sale. • New development activities are very limited due to a stricter condition impose by financial institutions and the soften demand Source: Colliers International [22,23,24,25,26,27] GDP ($m) www.laa.asn.au 21
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Supply Chain Report - Logistics Association of Australia

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