A $73-million next-gen vertical industrial development has been approved for Sydney’s west.
City of Parramatta has given the thumbs-up to Sydney developer Hannas’s Stream Northmead, which will span three storeys and comprise 34 warehouses with mezzanine offices from 102sq m to 441sq m, and 50 strata storage units from 17sq m to 89 square metres.
Northmead is 26km west of the NSW capital’s CBD.
The estate is next to the Westmead Health Precinct, Australia’s largest health and biomedical research precinct.
Stream Northmead “has been architecturally designed to harness natural light and prioritise space”, the developer said.
Hannas chief operating officer Charlie Martin said vertical industrial estates were the solution to warehousing and logistics, “with limited land leading more developers to go up”.
The Sydney sector’s vacancy rate remains the lowest in the country at 0.5 per cent and, according to CBRE, just 5 per cent of total industrial-zoned land in Sydney is undeveloped and serviced.
“Almost 40 per cent of the warehouses have been sold so far,” Martin said.
“Demand has largely stemmed from owner-occupiers planning around a future lease expiration who instead want to occupy an owned premise.
“Investors have been attracted to the opportunity to purchase within one of Sydney’s most tightly held industrial markets.”
Martin said industrial was moving away from the heavy industry, manufacturing style.
“We are noticing a new wave of businesses now requiring warehousing space that wasn’t there before; this market has continued to gain momentum since 2020 and is largely driven by the e-commerce boom,” he said.
Martin said the sector needed to adapt to meet these demands, with businesses wanting to be co-located with their full operation, which would mean more warehouses with integrated mezzanine offices and amenities.
“There is also a lifestyle element where individuals are purchasing storage units and warehouses as a practical extension of their home,” he said.
“Some are using it to store cars, or wine, all while having an asset that can experience capital growth over time. It’s practical but also an investment.”
According to Parkside Commercial Real Estate, rents within Northmead have increased 32 per cent during the past 18 months while the value of strata warehouses had increased 54 per cent during the past five years.
Construction on Stream Northmead is due to begin in the third quarter of this year and will take about 14 months to complete.
