Situs | Amazon the Disruptor

Amazon the Disruptor

NEW YORK and MELBOURNE, Australia, October 23, 2017 – US-based SEC-registered investment advisor Situs RERC and Melbourne-based advisory firm Urban Property Australia (UPA) are pleased to announce the release of the second issue of Australian Real Estate Trends – Amazon the Disruptor, which examines the economic and commercial real estate impact of Amazon’s imminent entry into Australia.

Category killer Amazon has had profound effects on the markets in which it operates, changing the entire retail landscape. In the US, Amazon now accounts for almost 5 percent of total retail sales and 38 percent of online retail sales, while its share of UK retail spending is estimated to be around 4 percent and its share of online sales at 24 percent.

Based on survey results from investors across the Australian real estate and financial markets spectrum, Situs RERC/UPA find that Australia’s brick-and-mortar retailers can expect increased pressure to compete and will be forced into making their businesses an experience rather just a place to shop. Industrial and logistics centres, on the other hand, if properly located, will became more attractive as e-commerce increases the need for warehouse space.

President of Situs RERC Ken Riggs says, “As Amazon continues to be an innovator and disruptor in many areas of our life, all eyes are on the winners and losers throughout the world at the hands of Amazon. In the US, the increasing market share of e-commerce sales worldwide has created losers on the sticks-and-bricks side of retail commercial real estate, but has created winners in the industrial distribution centres.”

Urban Property Australia Managing Director, Sam Tamblyn added, “Investors face a very real and serious threat with the expected arrival of Amazon. Just as in other parts of the world, Amazon is expected to have a major influence and direct impact on Australia. Amazon should be a boon to the Australian economy and industrial real estate, but the retail sector will likely experience a major shake-up.”

While Amazon has faced competitive hurdles in many of its other markets, its biggest challenge in Australia will be logistics. Australia is the sixth largest country in the world by area but has a low population density, so the cost of shipping is likely to challenge Amazon’s delivery model.

This report is free of charge and can be accessed here.

About Situs and Situs RERC
Situs has been the premier global provider of strategic business solutions for the finance and commercial real estate industries for over 30 years. Situs RERC, a wholly owned subsidiary of Situs, is one of the longest-serving and most well-recognized national firms devoted to valuation management and fiduciary services, appraisal and litigation services, and research, risk analysis and publications. A rated servicer with Moody’s, Fitch and Morningstar, Situs has more than US$165 billion of assets under management and is ranked a top 20 servicer in multiple categories by the Mortgage Bankers Association. In 2016, Situs received a second consecutive “Advisor of the Year” award by Real Estate Finance & Investment magazine, and the “Capital Advisor Firm of the Year” award by Property Investor Europe. In 2017, the firm won the “Industry Contributor of the Year” award from Real Estate Finance & Investment magazine.

About UPA
Urban Property Australia (UPA) was founded in 2009. Clients include many of Australia’s leading corporates, financial institutions and investors who appreciate UPA’s commitment to providing superior quality advisory services. Drawing on its in-depth market knowledge, UPA advises on property strategy and facilitates outcomes that align with its clients’ business objectives. UPA’s advisory and transaction management assignments are Australia-wide and have a proven track record for commercial property valuations in the Melbourne metropolitan area and key Victorian regional centres. Since its inception, UPA has advised on more than AU$25 billion in real estate transactions. For more information, please see www.upaustralia.com.au

For more information, contact:

Cecilia Panozzo
Chief Marketing Officer, Situs
cecilia.panozzo@situs.com

Sam Tamblyn
Managing Director, Urban Property Australia
stamblyn@upaustralia.com.au

Ken Riggs
President, Situs RERC
riggs@rerc.com