Investor interest in business-zoned development properties across western Sydney continues to rise, despite the current economic uncertainty.
To the year ending June 30, CBRE’s Western Sydney Capital Markets team transacted more than $52 million worth of assets in the class, headlined by a pair of $10m sales in Rouse Hill in the north west.
Food, fuel and hospitality developments account for the bulk of the sales, for projects in high-growth suburbs such as Auburn, Denham Court, Granville, Marsden Park, Schofields, Werrington and Windsor.
The locations span a vacant 922sqm lot to a 17,709sqm former car dealership, and include sites on major arterials, namely Parramatta Road, the Great Western Highway and Richmond Road.
The demand is also shaping settlement times, with an 8,200sqm lot in Schofields exchanging and settling for $5.1m within 24 hours recently.
In total, CBRE’s Alex Mirzaian, Robert Dowdy, Lord Darkoh, Andrew Sukkar and Raymond Ahsan transacted 15 business-zoned sites for an average of $5m across the year ending June 30.
“We have seen increased interest in recent months for business-zoned property in high-profile and main-road locations across Sydney’s west, despite the impact of COVID-19,” Mr Mirzaian, Head of Investment and Development Sales for CBRE Western Sydney, said.
“As population growth marches on in key south-west and north-west centres, commercial fast food, service station and retail developers are seeing huge potential and return in this type of development.
“These zoned properties are so sought-after, particularly among local investors, we are seeing groups able to exchange and settle in shorter periods than the standard 42-day settlement, including one on the same day.”
Isaac Property, one of the major developers in Sydney’s food and fuel market, has remained active in western growth centres in recent months.
A convenience retail development at 326 Annangrove Road in Rouse Hill, purchased for $10.2m, is among its current projects.
The 16,040sqm precinct will be led by a McDonalds, KFC and service station, and is also set to feature a childcare centre, gym, swim school and tyre centre.
“We have continued to aggressively pursue commercially-zoned sites during this COVID period, as tenant demand remains strong for new stores in our sector,” Ben Isaac said.
“Convenience retail, in particular service stations and fast food, has demonstrated itself to be largely pandemic-proof, with the majority of operators continuing to trade at similar or even higher trading figures than before.
“Airports, the CBD and universities have been heavily impacted, however our core focus is in the suburban regions of Sydney, which have remained strong throughout."
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
