M5 corridor redevelopments attract tenants

New industrial developments along Sydney’s Southwest M5 corridor are attracting migrating tenants, as costs continue to climb and residential conversions increase.

CBRE’s Southwest industrial team reported that over 50% of lease transactions along the M5 motorway in the past 12 months have been to local migrating tenants.

“Businesses are being pushed out of established markets such as South Sydney due to high costs, residential conversions and the need to secure newer facilities that meet functionality and ESG requirements,” CBRE’s Keegan Ridings said.

“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 southwest Sydney.”

The redevelopment of several older underutilised sites to state-of-the-art industrial estates is providing businesses with much-needed supply and the ability to relocate along the connected M5 corridor.

CBRE’s Tom Rourke and Adam Tresidder have brokered over 130,000sqm of lease transactions at the Moorebank Intermodal Precinct, all of which have been to existing Southwest based tenants.

The two most recent transactions include Mainfreight’s newly completed 55,000sqm facility and Sydney Tools 22,726sqm 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 – 3,250sqm 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 13,910sqm warehouses and will commence construction in 2024.  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, who were attracted to features such as super awnings, separate car and truck parking and targeted 5-star Green Star ratings.