The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Untitled design (8)
22 DAYS UNTIL OUR UNMISSABLE FLAGSHIP CONFERENCE MORE THAN 500 ALREADY ATTENDING
22 DAYS UNTIL OUR FLAGSHIP CONFERENCE 500+ ALREADY ATTENDING
SECURE YOUR SPOTDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
print
Print
IndustrialTue 13 Feb 18

Motorway Access Dictates Value of Industrial Assets

769e4c01-977b-4687-a19a-bba55f765c0d

The overall value of warehouses and other industrial assets in Western Sydney are largely dictated by their proximity to key transport routes.

In what may be an unsurprising revelation for many, CRBE released a report on the topic which outlined the specific numerical relationship between Sydney motorways and the industrial market.

Their research showed each additional minute drive closer to a motorway equates to a 2.1 per cent spike in rents.

After analysing 375 industrial leases since 2014 in the Western Sydney area, researchers discovered occupiers pay on average $3 per square metre more for each additional minute drive to a motorway, while rents dropped in all submarkets as facilities move further from the motorway.

Related reading: Speculative Industrial Development Gathers Pace in Western Sydney

The report showed supply chain intensive occupiers could benefit from greater transport related savings that offset the more minor increases in real estate costs by being closer to motorways.

With transport costs typically a large share of an industrial operation’s cost base compared to rental costs, industrial occupiers can make savings by locating themselves nearer to key infrastructure.

CBRE’s James Melville said the findings reflected the importance on supply chain efficiencies amid the increasing geographic division between consumption and production.

“Factories have become more specialised and separated from the warehousing and retail stages of the supply chain. This fragmentation has resulted in a greater importance of supply chain considerations on locational decisions,” Melville said.

Related reading: Developer Lodges Plans for Major Industrial Conversion in Sydney's West

“Much of Sydney’s large-scale warehousing logistics operations have shifted west towards precincts such as Eastern Creek, which have excellent access to the road network and, by extension, Sydney’s residents.

“For an occupier assessing their location options, a one per cent drop in transport costs is equivalent to a 10 per cent drop in rental costs,” Melville said.

CBRE’s analysis did not directly adjust for asset quality.

IndustrialAustraliaParramattaSector
ADVERTISEMENT
TOP STORIES
Bates Smart Richmond Sportslink HERO
Exclusive

BtR Focus Drives Bates Smart’s Richmond Sportslink Concept

Leon Della Bosca
6 Min
Exclusive

Carparking Correlation: How Parking Fees Provide Office Sector Health Check

Taryn Paris
6 Min
Molti chief Ben Teague out front of 32 Mercer Road Aramadale (rendering)
Exclusive

Buy to the Sound of Cannons: Molti’s Counter-Cyclical Move to Melbourne

Leon Della Bosca
5 Min
Exclusive

Tapping the Bunnings ‘Halo Effect’

Taryn Paris
5 Min
Exclusive

‘Construction Not a Scale Game’: Hutchinson

Phil Bartsch
9 Min
View All >
Bates Smart Richmond Sportslink HERO
Exclusive

BtR Focus Drives Bates Smart’s Richmond Sportslink Concept

Leon Della Bosca
Construction of skyscrapers in the city
Development

Sector Confidence Steady but Reform Calls Grow Louder

Leon Della Bosca
Construction workers building social housing in Gosford, New South Wales.
Affordable & Social Housing

HA Contracts Adds 18,000-Plus Homes to Pipeline

Marisa Wikramanayake
The program of social and affordable homes across the nation is moving ahead with $14 billion in funding in place…
LATEST
Bates Smart Richmond Sportslink HERO
Exclusive

BtR Focus Drives Bates Smart’s Richmond Sportslink Concept

Leon Della Bosca
6 Min
Construction of skyscrapers in the city
Development

Sector Confidence Steady but Reform Calls Grow Louder

Leon Della Bosca
3 Min
Construction workers building social housing in Gosford, New South Wales.
Affordable & Social Housing

HA Contracts Adds 18,000-Plus Homes to Pipeline

Marisa Wikramanayake
2 Min
the four concept towers approved for sydney metro's parramatta precinct
Development

Rush of Approvals Sends Parramatta Skywards

Renee McKeown
2 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/motorway-access-dictates-value-of-industrial-assets