A large greenfield site in Potts Hill, 21km south-west of the Sydney’s CBD, has sold at a record rate for the suburb at nearly $1700 per square metre.
The 1.8ha property, at 10 Nelson Short Street, neighbouring Bankstown Town Centre and Birrong Train Station, was sold with development application approval for a substantial aged care and independent living estate.
The plan includes 160 independent-living units in addition to a 70-bed care facility, medical centre and cafe.
The site holds business park zoning permits, offering the new owner a range of potential uses including light industrial, office premises, warehousing, distribution centres and childcare centres, subject to council approval.
It was purchased by a recently formed, Chinese-backed development company, Potts Hill Group.
The $32-million deal was negotiated by Demi Carigliano, Anthony Pirrottina and Darren Benson of Knight Frank
Carigliano said the property had attracted high interest, evidence of Sydney’s continued market strength for development sites, with eight first-round expressions of interest, resulting in an unconditional sale with 42-day settlement.
“The campaign generated interest from a range of commercial and industrial developers, in addition to owner-occupiers seeking to secure a rare infill development site of scale in thriving metropolitan Sydney,” Carigliano said.
“[The site] boasts a high-profile and is in a landmark position at the gateway to the Chullora industrial precinct within Sydney’s renowned and highly sought-after inner south-west.
“With the current lack of new industrial supply, the demand for industrial development sites continues to go from strength to strength.”
The commercial property market has remained highly active as it continues to respond to Covid trends such as hybrid working, shifts in demand for retail assets and strong investor appetite for industrial real estate.
Prime industrial assets are now regularly trading on yields below 4 per cent while, more broadly, average yields on prime logistics facilities now trade on cap rates below those struck for prime office towers.
Scarcity of supply has also been underpinning speculative industrial developments and buoying the market.
A speculatively developed warehouse constructed in Prestons in Sydney’s west recently set a new benchmark for industrial property in Australia after selling to new investment group Pittwater Industrial on a 3.35 per cent yield brokered by JLL’s Roger Miller and Tony Iuliano.
The $58.3 million sale of the 15,100sq m facility at 5 Yarrawa Street in Prestons eclipsed the previous record low yield of 3.6 per cent struck on the $200 million sale of a Fantastic Furniture and DB Schenker warehouse also in Sydney’s west late last year.
