Coombes Property Group has bought an industrial landholding in southeastern Sydney for $25.25 million, reflecting a land rate of $3,396 per sqm. 

The 7,435 sqm site was located at 2-4 Hale Street in Botany – about 11km southeast of the Sydney CBD. 

The sale of the site, which had 11 leases, came at a time when the Sydney industrial vacancy rate was at 1.5%, while many individual precincts were well below that level. 

The deal follows a flurry of industrial property investments throughout Sydney in recent times, including Pittwater Industrial’s purchase of a new logistics facility in Prestons for $58.255 million, representing a capitalisation rate of 3.35%.  

Prior to that, Leda Holdings sold a 7.71-hectare industrial infill site in Milperra in Sydney’s west that was earmarked for a new multi-storey logistics redevelopment.    

In February, Logos, KKR and Mubadala Investment bought industrial development sites in Sydney and Melbourne, while Centuria Industrial REIT purchased a portfolio of six urban industrial assets located across Melbourne, Sydney and Brisbane in January. 

Colliers Industrial Director Tom Barnier and Industrial Executive Jeremy Green sold the Botany property. 

“This is a landmark sale and the price achieved is substantiated by the fact that 2-4 Hale Street is one of the last remaining large-scale development sites remaining in Botany, further adding to the significance of this transaction and highlighting the demand for prime land in South Sydney,” Green said. 

“Primarily due to the limited prime assets on the market, we have begun to see that the capital seeking industrial and commercial property has started to shift towards securing development land for investors, aiming to create their own purpose-built assets. 

“This is exactly what we have seen in this deal and will continue to see in South Sydney as there is still so much unplaced capital to be invested.” 

Barnier said the buyer had historically focussed on acquiring commercial property and this transaction was their first substantial industrial purchase in South Sydney.  

“This signifies the strength of the industrial property market and the buyer’s vision to capitalise on one of the most rapidly growing and highly coveted asset classes in the wake of the pandemic,” Barnier said. 

“Coombes Property Group has a vision to add value to this site over time, based on there being an extreme lack of industrial land, coupled with record-low vacancy levels.” 

Colliers said the lack of vacant sites left for development in South Sydney was aiding recent price growth, particularly for land.  

At the same time, the withdrawal and rezoning of industrial land for alternative uses had placed substantial pressure on the area’s remaining industrial land stocks.  

Colliers estimated that there was only 27.2 hectares of vacant industrial zoned land within South Sydney, while over 120 hectares of former industrial land have been rezoned for other land uses since 2012.