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Industrial property heavyweight Goodman Group is likely to be the biggest property beneficiary from online retail giant Amazon's push into Australia, but the retailer's overall impact on the sector will be more muted.
That's the view of Shaw and Partners real estate analyst Peter Zuk who suggested Amazon might look to initially build two large format fulfilment centres of around 100,000 square metres each in Sydney and Melbourne.
"Two large sheds in Australia may be worth $308 million – not that large in the context of the total Australian industrial market," Mr Zuk wrote in a new Goodman note following this week's news that Amazon would roll out its full retail offering in Australia over the next few years and is actively looking for a large distribution and fulfilment centre in Australia.
"The unknown is whether it will take on smaller occupancies as well to help with "the last mile" delivery of goods," he noted.
Mr Zuk said even if landlords did win business from Amazon it would not be a "one way benefit" with Amazon not expected to pay above market rates for rents and like any tenant, "will look to be incentivised".
He added that because of the way Amazon squeezes merchandise into their warehouses, they could create more lettable area simply by adding mezzanine levels, but without generating higher rent for landlords.
Mr Zuk said Goodman, which is already Amazon's main landlord globally, was "a potential but not guaranteed beneficiary and other land owners cannot be ruled out. It will boil down to space requirements and pricing," he said.
Fairfax Media has reported Amazon may have already signed a lease for a purpose-built warehouse at the Goodman Group's $50 million Oakdale Industrial Estate in Sydney's Eastern Creek.
A spokeswoman for Goodman Group declined to comment.