Could this $10 million warehouse sale be a sign of what's to come?

The recent sale of a Queanbeyan warehouse for more than $10 million could offer a glimpse into what's to come for this booming sector.

The industrial and logistics sector reached close to $300 billion in value in 2023, sitting on par with the office sector for the first time, data from commercial property firm CBRE shows.

The firm says record growth in rent prices, plus a booming e-commerce market that relies on warehousing, has led the sector to become the preferred property asset class for international investors.

The growth is set to continue in the coming years, CBRE head of industrial and logistics research, Australia Sass Jalili said.

"We forecast Australia's industrial and logistics investable universe will reach $410 billion in the next decade and expect the asset class to remain the dominant commercial sector over the next few years," she said.

In December, an industrial warehouse at 67 Kendall Avenue, Queanbeyan West sold for $10.25 million.

The three-acre property includes two warehouses, office space and a showroom, together totalling 4440 square metres of floor area.

Selling agent Mitch Frail, associate director capital markets ACT at JLL, said there was significant interest from investors and occupiers during the five-week sale campaign.

He said the investors ultimately walked away because the rental return didn't stack up, given the warehouse building was "relatively old".

High land prices and build costs did, however, make it an appealing option for owner-occupiers.

Glass manufacturer Jeld-Wen Australia sold the property to building supply company CSR, CoreLogic records show.

It is understood CSR, which is also located in Fyshwick, will occupy the building.

Mr Frail said the deal showed there was strong demand for existing warehouses on large blocks of land.

Commercial buyers were being enticed over the border where prices were cheaper compared with other industrial areas like Fyshwick, Mr Frail said.

"Land prices are a lot less and your outgoings are a lot less being across the border in New South Wales. Rates, especially, are a lot less comparatively," he said.

The rise of e-commerce meant there was a greater need for properties for "last mile logistics", Mr Frail said, which refers to a product's final journey from the warehouse to its destination.

A report into the sector by JLL noted challenges in global and domestic supply chains was fuelling demand for warehouse space "as retailers and wholesalers look to mitigate inventory risk".

"Conversely, goods movement in and out of Australian ports is slowing as shipping freight access and routes remain congested," the report noted.

As an investment, industrial properties also offered a lower price point compared to offices, Mr Frail said.

"Rents are going up, vacancies are at an all-time low and you can get a single-titled asset for $1 million or $2 million," he said.