This article is from the Australian Property Journal archive
ESR Australia will spend around $270 million on its first move into Western Sydney Aerotropolis, after spending $70 million on a Badgerys Creek development site.
The scalable 17-hectare parcel in Badgerys Creek, less than 3km from the entrance to the new Western Sydney Airport in the Liverpool City Council area.
Zoned within Priority 1 Zone for Enterprise/Light Industrial development, the site fronts the main arterial of Martin Road and will see ESR spend circa $270 million on the acquisition and development delivering a total gross floor area of circa 82,000sqm across four prime logistics warehouses.
“ESR Australia is pleased to secure the scalable Martins Road site and will exercise its robust development capability to ensure the delivery of premium facilities in line with the anticipated opening of Western Sydney Airport in 2026,” said Phil Pearce, CEO at ESR Australia.
“Future customers at ESR’s Martins Road site will have the ability to be operational as soon as Western Sydney Airport comes online. They will also have the benefit of leading-edge renewable energy infrastructure, which is an increasing concern for our customers with the rise of automation and electrified fleets.”
The Badgerys Creek development will be delivered in line with the group’s current ESG commitments, with a focus on reducing energy consumption and incorporating human-centric design in consultation with local communities.
Investment in the site has been committed by ESR Australia Development Partnership II (EADP II).
Harry Bui from Colliers managed and negotiated the deal, acting on behalf of the private Vietnamese private family office.
“As this is one of the last remaining blocks of this size owned by the private family, the owner has previously been approached by several developers to acquire the site,” said Bui.
Industrial rents in Western Sydney have seen land prices surge, with rents up 27.5% in the first six months of 2023 up on a record 33% in 2022 and way above the long-term average of 4.9% per annum.
This transaction shows investment demand for industrial assets has not slowed. ESR’s acquisitions comes hot on the heels of Lendlease’s Australian Prime Property Fund Industrial buying a neighbouring facility Sydney’s central west from Altis Property Partners for $47.05 million to develop a multi-level logistics facility.
Recently Centuria Capital secured a $500 million mandate from a significant US investment firm to acquire last mile logistics assets in supply-constrained infill industrial markets across Australia.
Last month Centennial’s $700 million Enhanced Value Partnership (EVP) fund with Brookfield Real Estate Secondaries acquired two facilities in Sydney from Centuria for $83.64 million.
