Industrial property landlord Goodman says it's still on track to have $5 billion of development work underway, as it targets "global gateway city" locations in a bid to profit from the booming e-commerce sector.
It comes amid forecasts online sales will account for about 22 per cent of total global retail sales by 2023.
The property group also said it will commence a strategy of developing multi-storey warehouses in areas of South Sydney and Melbourne where land is scarce.
Goodman chief executive Greg Goodman noted development work in progress grew from $4.1 billion at the end of June to $4.2 billion by the end of the September quarter, at the release of its quarterly update on Tuesday.
Mr Goodman said the work in progress figure is still on track to reach $5 billion later this financial year, with a strong second quarter expected. The company's assets under management had climed to $48.2 billion by the end of the September.
Macquarie Bank analysts noted Goodman's existing development book will underpin material development profits and asset under management growth.
Mr Goodman noted the company has been pursuing a strategy of boosting its land banks, including the addition of the Smithfield site in Sydney's inner west.
"The increasing development pipeline is an indication of the demand for space as e-commerce sales grow and as consumers' demands increase, our customers are responding by consistently seeking to create more efficient logistics networks," Mr Goodman said.
He said Goodman is incrementally increasing the land banks and with the tight supply and high land values, "we see an opportunity for multi-storey sites in South Sydney and Melbourne.
"Our land acquisition strategy supporting this is a continuous process that has seen further additions.
Redevelopment of existing stabilised assets is also occurring in a number of markets. We believe that this activity will contribute to the future development pipeline, adding value to our existing land holdings."
Leanne Truong, research analyst at Shaw and Partners, said despite a subdued consumer market, Goodman continues to benefit from the growth in online sales, in particular given its focus on urban locations.
"Goodman's latest quarterly update continues to impress, with growing assets under management and development margins," Ms Truong said.
Mr Goodman said another trend that will continue in the sector is the demand for longer term rental contracts from tenants.
"Tenants are investing heavily in technology in warehouses to make them more efficient and as a result are looking to sign much longer leases," Mr Goodman said. "I've signed more long-dated leases in the past year than at anytime in my career."
Phil Montgomerie, head of research at Savills Australia, said industrial property and logistics remain an attractive asset class for investors, driving the sector to a record low capitalisation rate.
"The asset class continues to benefit from densification and location infill," Mr Montgomerie noted.
"Capital is still attracted to the three main capital cities, with about $5.3 billion in asset transactions, resulting in a further 50 basis points in capitalisation rate compression."
Goodman will hold its annual general meeting on Wednesday, November 20.
Goodman share closed down 1.32 per cent to $14.24.