This article is from the Australian Property Journal archive
DEVELOPER joint-venture partners Trumen and Norman Property have put a brand-new logistics estate in Sydney’s central west to the market with expectations for $40 million.
Due for completion in October, the Homebush Logistics Centre at 201 Parramatta Road occupies a site area of 2.3 hectares and has a gross lettable area of 10,482 sqm across eight individual units.
Savills and Colliers have been appointed to market the property.
“The Homebush Logistics Centre has set a new benchmark for estates in Sydney’s central west, elevating the standard and achieving premium rents,” Savills’ Michael Wall said.
Vacancy in the precinct is at a low 0.5%, while underlying tenant demand remains elevated – particularly in this convenient ‘last mile’ location offering outstanding proximity to one of the state’s most densely populated catchment areas, Wall said. Within 30 minutes of Homebush, over 3.6 million residents can be reached in a 30-minute drive time.
“High quality, multi-tenanted assets within Sydney’s infill logistics markets such as the central west are highly sought-after by institutional investors due to the historical low precinct vacancy rate accelerating strong rental growth forecast,” said Colliers’ Gavin Bishop.
Savills and Colliers say demand for western Sydney industrial property continues to outstrip supply with more than 1.5 million sqm in active tenant briefs within the market. Prime net face rents in the central west have increased by 41% since 2019 and, over the last decade, have risen almost 62% – more than any other precinct in Sydney. Homebush has been the standout performer in western Sydney with 21.7% growth over the past year.
The estate offers access to Sydney’s arterial road network with high exposure to Parramatta Road and the M4 Motorway. It has flexible B6 enterprise corridor zoning, allowing for a range of future uses.
“Supply chain issues throughout the COVID-19 pandemic coupled with the growth of on-demand delivery have highlighted the need to hold incremental inventory closer to the customer to meet delivery times, and this has pushed rents to historic levels.”
The appetite from households for retail spending despite a number of challenges remains resilient, with the latest data showing a further 0.9% growth in May, representing 10.4% growth over the year and a new record high.
Household saving rate remains elevated above pre-pandemic levels. While there is some uncertainty for household spending in the coming months due to higher inflation and the recent rise in interest rates, the share of online retail spending remains at the high levels seen consistently through the last two years. Online retail spending represented 10.7% of total retail sales in May, similar to the April share, and above the five-year average of 7.9%.
Expressions of interest for Homebush Logistics Estate close 01 September.
The Sydney industrial market was the nation’s second-most active in the first half of 2022, with an 18% increase in transactions to $3.6 billion.
