Boosted by strong population growth, investment in infrastructure and relative affordability, compared to precincts closer to the CBD, Sydney’s south west industrial and logistics market has been one of the strongest performers across Australia this year.
Nowhere is that growth more evident than along Sydney’s south west M5 corridor where new industrial developments are attracting all-comers.
CBRE’s south west industrial team attributes a reported 50%-plus of lease transactions along the M5 motorway in the past 12 months to local migrating tenants.
The overall vacancy rate within the region currently was at around 0.5% for Q3 2023, making it one of the tightest markets in the country.
Inner south west starved of A-grade warehousing
According to CBRE’s Keegan Ridings, with the inner south west lacking vacancy, many major tenants are becoming displaced, while others are being pushed out of established markets such as South Sydney due to high costs and residential conversions.
Then there are those businesses that are migrating west, adds Ridings, to put their foot in newer facilities that meet functionality and ESG requirements.
For example, businesses have been quick to snap up older underutilised sites along the M5 corridor that have been redeveloped as state-of-the-art industrial estates.
“By the same token, these occupiers have reported the importance of employee retention which they can achieve by staying local to the M5 arterial as it maintains access to the large employment workforce of south west Sydney,” said Ridings.
Milperra
A few weeks ago Colliers’ team of Angus Urquhart and Trent Gallagher started marketing a multi-level property with LJ Hooker’s Jon Orsborn and Ryan Jennings on behalf of Hale Capital in Sydney’s South West.
Located at Milperra, this multi-level industrial development is understood to be the first ever to be put on the market for lease.
The entire 37,526 sqm space at 339 & 349 Horsley Road in Milperra offers occupiers an unprecedented opportunity with functional ramps and one-way traffic circulation able to accommodate B-Double access to both levels.
The 30 m wide breezeways allow for undercover all-weather loading.
Moorebank & Minto
Meantime, CBRE’s Tom Rourke and Adam Tresidder have brokered over 130,000 sqm of lease transactions at the Moorebank Intermodal Precinct, all of which have been to existing South west-based tenants.
The two most recent transactions include Mainfreight’s newly completed 55,000 sqm facility and Sydney Tools 22,726 sqm pre-lease which will be completed in Q1 2024.
CBRE together with Cushman & Wakefield are managing the lease for Dexus’ Velociti last-mile industrial estate in Moorebank.
Velociti is an architecturally designed estate comprising seven 2,000 – 3,250 sqm warehouses set for completion Q4 2024.
The estate will provide immediate proximity to rail via the Moorebank Intermodal and Sydney’s arterial road network via the M5 motorway and will offer occupiers 24/7 operational efficiencies.
CBRE is also managing the pre-lease for Charter Hall’s Airds Road Logistics Hub in Minto which features two 13,910 sqm warehouses and will commence construction in 2024.
It’s understood the estate will piggyback off the success of the neighbouring Culverston Road development which appealed to big-name tenants including Bunnings, Toyo, and CL Logistics.
What attracted these tenants were features such as super awnings, separate car and truck parking and targeted 5-star Green Star ratings.
