A lack of prelease opportunities in Sydney’s industrial property market is underpinning increased demand for infill sites across the city according to CBRE National Director, Industrial Brokerage, Jason Edge.
While englobo sites were still highly sought after, developers and investors were increasingly looking at other opportunities across Sydney.
“A shortage of new supply entering the market has seen a shift in interest towards infill sites to satisfy the lack of new opportunities,” Mr Edge said.
“Furthermore, businesses relying on metropolitan distribution rather than warehouse distribution, as well as a work force reliant on office accommodation, have prompted more and more developers to look at these locations rather than the greenfield sites located at Erskine Park.”
Highlighting the increased demand for Sydney infill sites, is property development, design and construction firm Commercial and Industrial Property’s (CIP) recent acquisition of two prominent properties for a combined total of $25.9 million.
CIP purchased a 5.3ha site in the western Sydney suburb of Smithfield for $14.6 million and was able to pre-lease the entire site to Manheim with Charter Hall forward funding the transaction.
Located at 384-400 Woodpark Road, the large parcel of land is completely secure and is situated in a highly established and strategic industrial precinct on the doorstep of Sydney’s major arterials.
In a separate deal also transacted by CBRE, a joint venture between CIP and the GPT Group acquired a 4.1ha parcel of land in the prominent industrial hub of Chullora for $11.3 million.
Situated at 14-18 Worth Street, the property comprises two titles and is located in close proximity to several major distribution centres including Australia Post, News Limited, TNT and Primo.
The site also benefits from an extensive surrounding transport network including easy access to Sydney’s M4 and M5 motorways.
Since the acquisition, Australia Post committed to a pre-lease, where Charter Hall was the forward funding purchaser.
Mr Edge said, “Chullora continues to be a location in high demand. Occupiers not only benefit from the surrounding road network, but the Enfield Intermodal Terminal will see this area continue to transform.”
Recent data from CBRE Research shows investors remain highly active in Sydney’s industrial market, both in the city’s inner and outer areas.
“There continues to be a strong investment focus on assets within Sydney’s infrastructure-laden areas,” CBRE Senior Director of Industrial Investments Angus Klem said.