Sydney, 8 April 2013- Just three options remain for buyers seeking large tracts of industrial land in South Sydney according to a new market analysis from CBRE.
The CBRE review highlights a series of land sales in Botany and Alexandria over the past six months which has seen the supply of land decrease significantly.
CBRE South Sydney Managing Director Nathan Egan said purchasers seeking land that was ready to build on now had less than a handful of options, those being a 4,200sqm site in Botany, a 3,000sqm site in Rosebery and a 6,500sqm site in Alexandria. This compared to circa 10 hectares of land which was available in the lead up to Christmas last year.
Mr Egan said the next land to be released - a 10 hectare subdivision in Botany - would not be ready for up to 12 months, which had created a noticeable supply/demand imbalance.
“Owner occupiers have been driving the South Sydney market and have had a particular focus on sites that are available with vacant possession in an environment where the access to capital is easing,” Mr Egan said.
“Investors are taking a more traditional, passive view on the market and are seeking tenanted investments with five-plus year Weighted Average Lease Expiries (WALE s), however very few of this style of assets are available in the South Sydney market.”
Recent sales include:
1.Lots 2-11/67A Bourke Road, Alexandria – Macquarie Bank sold this 24,415sqm site to City of Sydney Council (an owner occupier) for $25 million.
2.Lots 12-16/67A Bourke Road, Alexandria – Macquarie Bank sold this 13,543sqm site to Waverley Council (an owner occupier) for $9million.
3.Part 100-110 Euston Road, Alexandria – Lyndsay Bennelong sold this 4,800sqm site to Plasta Masta (an owner occupier) for circa $1,250/sqm.
4.Lot 31, Coal Pier Road, Botany – Australand sold this 4,197sqm site to Walkers Removals (an owner occupier) for an undisclosed price.
5.47 Swinbourne Street, Botany – Macquarie Bank sold to Goodman for circa $425/sqm. Site area is circa 54,500sqm. Goodman is seeking pre-commitments from tenants for development.
In the case of the Bourke Road, Alexandria sites, Mr Egan said both councils intended to utilise the land as depots for their operations in their LGA’s.
“Alexandria is the closest and most convenient industrial location for Waverley to ensure long term depot operation without being affected by residential creep,” Mr Egan said.
“City of Sydney is locating in this area for similar reasons and the site they have acquired is a good fit being in their LGA.”
Mr Egan attributed the recent increase in site acquisitions to a number of factors, namely lower interest rates and the limited supply of new and existing industrial stock in South Sydney.
“Buyers recognise the longer term supply issues and are making purchasing decisions with a long term focus,” Mr Egan said.
“There has also been an increase in buyer confidence given the more stable global economic outlook.”
For Australian/international news or global stories, follow us on Twitter.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2012 revenue). The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website atwww.cbre.com.au.