“We’re not seeing cancellations. Our customers, the builders, have got full books,” Bakewell said.

The business owns the clay it manufactures bricks and tiles from and has locked in fixed-price gas contracts, a major cost component, until 2024, escaping many of the inflationary pressures hitting the economy.

It plans to sell a further $1.3 billion of property assets into the fund, including a 75-hectare Oakdale East parcel in NSW and 332 hectares of surplus land at Craigieburn in Victoria.

Heavyweight Goodman’s market value of $35.8 billion puts it firmly at the top of the ladder as the country’s biggest industrial landlord, fund manager and developer, and one of the largest worldwide.

Brickworks also has a long-standing investment in Washington H. Soul Pattinson, a diversified investment house and ASX100 company.

The deal comes as the industrial property sector’s huge decade-long growth appears to be losing steam. Online giant Amazon warned recently it has “too much warehouse space” and the cost of debt is rising.

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Brickworks said it expects earnings before interest and tax (EBIT) this year to exceed $620 million, compared to $253 million in the last financial year.

Colliers’ managing director for industrial, Gavin Bishop, said industrial vacancy rates have fallen to new lows and currently average 1 per cent nationally in the second quarter of 2022, down from 2.3 per cent in the March quarter.

Bishop said the lack of leasing options has driven a further acceleration of rents across all markets in the three months to June, with the national weighted average prime rent increasing by 5.6 per cent, representing a record high while year-on-year growth of 13.8 per cent has been recorded.

“While macro headwinds have emerged, including higher inflation, interest rates and funding costs, the fundamentals of warehouse demand remain strong and will continue to drive growth in take-up and rents,” Bishop said.

“Vacancy rates are forecast to remain close to their current levels as new supply is largely pre-committed.”

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