The Market is Heating Up

Australia’s cold chain logistics sector is undergoing constant and rapid transformation, spurred by rising demand for fresh food, pharmaceuticals, and e-commerce deliveries.

Demand is on the Rise

The main drivers of growth are in the food and beverage and pharmaceutical sectors. Over 40% of Australian retail spend is on food, and that figure is climbing with population growth and the surge in online grocery shopping. In 2023 alone, Australians spent approximately A$13 billion online on food and liquor. In 2024, Australians spent approximately A$13.6 billion online on food and liquor, marking an increase from the A$13.2 billion spent in 2023. This growth reflects a continued shift towards online shopping for everyday essentials, driven by factors such as convenience and cost-effectiveness.

The rise in online food and liquor sales is part of a broader trend in Australia's e-commerce sector; in 2024, total online spending reached a record A$69 billion, up 12% from the previous year. This sustained growth in online food and liquor sales underscores the importance of efficient cold chain logistics and storage solutions to meet the evolving demands of Australian consumers.

Our export profile is also sharpening. Food and beverage exports make up 11% of national manufacturing exports by value. As Asian markets continue to seek Australian produce, the need for robust cold logistics intensifies.

Capacity Crunch

Australia currently has around 10.2 million cubic metres of refrigerated warehouse space. That’s only 0.4 m³ per urban resident.

With vacancy rates sitting near zero, the sector is already at full stretch. A limited supply pipeline of temperature-controlled warehouses means this crunch is likely to worsen without substantial investment.

The 3 major players dominate the Australian cold storage landscape, Lineage Logistics, Americold and NewCold. These operators are expanding aggressively to meet demand, with facilities like NewCold’s continuing expansion in Truganina, showcasing modern, high-capacity design.

Rents and Returns

Cold storage isn’t just a hot sector—it’s a premium one. Leasing rates for temperature-controlled facilities are often double those of standard industrial assets. Yields are also attractive, offering 50 to 100 basis points more than dry warehouses due to their scarcity and high barriers to entry. Location is critical. Proximity to transport hubs and urban centres greatly affects cost, demand, and turnaround efficiency.

The Road Ahead

Forecasts are bullish: from a market size of A$2.67 billion in 2024, Australia’s cold storage sector is projected to grow nearly sixfold to A$14.83 billion by 2034. To support this growth, new developments—both speculative and built-to-suit—are already underway across Melbourne, Sydney, and Brisbane. As Australia grapples with supply constraints, opportunities abound for investment, innovation, and expansion in this vital sector of the supply chain.

As champions of the cold chain, we stand at the forefront of a sector that's not just growing but thriving with purpose and potential. Now is our moment to lead with innovation, collaboration, and confidence in the future we’re helping to build for Australia. We look forward to seeing you at our upcoming conference at the Langham to thrash out more facts and figures, and of course solutions for the year ahead.