In The Cold Achiever, we explored Australia’s cold storage capacity gap — and why that shortfall represents a major opportunity for investors. In this post, we shift focus to the powerful demographic, economic, and global trade forces driving long-term demand.

Demographics, spending and trade

Food security concerns and supply chain complexities are driving greater investor interest in cold storage warehouses. This growing demand is underpinned by structural forces shaping the logistics sector - namely demographics, consumer spending, and global trade.

Population tailwinds & the rise in consumption

Australia’s population growth has rebounded faster than expected post-pandemic, fuelled by a strong recovery in net overseas migration. In 2023, the nation experienced its fastest population growth on record, and while growth has moderated slightly in 2024 to 1.7%, the long-term trajectory remains strong.

To put this growth in perspective

Australia’s population has more than tripled since 1950, outpacing comparable economies like the United States (+187%), Canada (+130%), and Western Europe (+38%), according to UNCTAD.

This demographic momentum is amplifying demand for cold storage in dense urban centres, where consumers expect year-round access to fresh and perishable goods.

Income recovery fuels consumer spending

After bottoming out in 2023, real household incomes are rebounding, supported by moderating inflation, rising wages, tax cuts, and lower interest rates. This upturn is driving a broad-based recovery in consumer spending.

Higher disposable incomes are not only boosting food consumption but also shifting preferences toward greater convenience, premium quality, and freshness, all of which underpin growing demand for cold storage infrastructure.

• The RBA expects household consumption to grow by 1.9% in 2025, doubling the pace of 2024, before strengthening to 2.4% in 2026.
• Deloitte Access Economics forecasts a similar trajectory, with household consumption projected to grow by 1.8% in 2025 and 2.7% in 2026, then average 2.0% annually over the next decade.

Changing Consumption Patterns: Food, Hospitality, and E-commerce

Appetite for storage

Consumers are also prioritising restaurant and hospitality spending in their consumption patterns, which will support demand for cold storage and logistics.

Hospitality spend fuels the freeze

Oxford Economics predicts that restaurant and hotel spending will continue to outpace total consumer spending for the remainder of the decade, a notable contrast to the 2010s, when restaurant and hotel spending and overall consumer spending grew at broadly the same pace.

Groceries go digital

E-commerce accounts for 12.1% of total retail sales, up from 10.9% in Q2 2022. Retailers must now expand their cold storage capabilities to meet delivery timelines, reduce waste, and preserve quality across a broader range of perishable goods.

Global Trade and Cold Chain Complexity

Rising incomes and urban tastes are driving demand for fresher food and faster delivery, putting pressure on cold chain infrastructure.

From port to plate

Rising household incomes and urbanisation are reshaping food consumption, with growing demand for fresh and organic produce, frozen meals, and premium protein and dairy. These shifts are increasing the complexity of cold chain logistics, driving greater investment in temperature-controlled storage and handling at every step from port to plate.

Beyond food: Pharmaceutical cold chain growth

The pharmaceutical sector is a growing force behind cold storage demand. Biopharmaceuticals, temperature-sensitive vaccines, and high-demand metabolic medications require strict cold chain compliance, spurring demand for secure, specialised facilities.

Enabling factors: technology and regulation

Advances in refrigeration, insulation, and warehouse automation are improving energy efficiency and lowering costs, making cold storage more scalable and investable. Simultaneously, tighter food safety and pharmaceutical regulations are prompting upgrades and replacements of ageing facilities.

Cooling closer, safer, smarter

Urbanisation is intensifying the need for cold storage near population centres to reduce transit times and preserve product integrity. Proximity to end users is now essential for both efficiency and compliance.

Cold storage as core infrastructure

Together, these forces signal long-term demand for additional cold storage, both in emerging growth corridors and in undersupplied urban infill markets across Sydney, Melbourne, and Brisbane.

Cold storage has evolved into strategic infrastructure, critical to an economy shaped by demographic shifts, supply chain resilience, and rising consumer expectations.

Up Next: Location Is Everything

We’ve explored the forces driving cold storage demand — but where should that capacity go? In our next post of the Cold Storage series, we map the clusters, bottlenecks, and growth corridors along Australia’s East Coast, revealing the submarkets where location is the ultimate competitive edge.

Disclaimers:

The postings by any individual on any blog do not necessarily represent the position of Savills, its strategies or opinions.