According to Colliers’ latest report, Western Sydney is expected to have record-levels of demand for industrial land although availabilities are limited.
The investment management company says in its Industrial Development Update, the Western Sydney industrial and logistics market recorded its strongest year on record in 2021.
It notes the record level of take-up was due to positive structural tailwinds, a large re-weighting of capital as well as new pricing benchmarks.
“Industrial land availability has continued to decline off the back of record levels of occupier demand,” David Hall, Colliers National Director for Industrial says.
“At present, there are 1805 hectares of net-developable industrial land across the market, which represents a decline of 9.5 per cent from mid 2021,” he adds.
“Demand has been extraordinary with over 260 hectares taken up in 2021, which was almost double the levels recorded in 2020 and the long-term average. The take-up of land was strongest within the Kemps Creek and Eastern Creek precincts while the Mamre Road Precinct alone recorded take-up of more than 60 hectares in 2021.”
The report reveals many institutions have shifted their mandates to a build-to-core strategy or are targeting infill locations that offer development upside for return hurdles to be met.
It says it continues to place immense pressure on industrial land in Sydney’s Western submarkets.
According to the report, more than 800 hectares of industrial space will become available as warehouse space will increase throughout 2023.
“In the short term, the availability of land for 2022 is limited with just over 220 hectares that could be developed, taking into consideration the ownership structure and other planning constraints,” Jock Tyson, Colliers Executive for Industrial says.
“Take-up land in 2022 is expected to remain significant, albeit constrained by the lack of availability in the short term,” he adds.
“We expect take-up to again exceed 200 hectares for the years as both tenants source pre-commitments and developers progress ahead with speculative developments,” Luke Crawford, Colliers Director of Research says.
Most of the available industrial land will be in the Mamre Road Precinct, while other land will become available within the Western Sydney Employment Area although most of this is owned by private landowners.
Up to 280,000 sqms of speculative projects will be brought to market in 2022.
Some developers may source a pre-commitment because of rising construction costs.
The report also notes that land values in Western Sydney are expected to rise in 2022 with new pricing benchmarks expected to be set across both infill and greenfield sites.
“Yield compression is expected to have less of a bearing on land values with yields expected to stabilise in 2022, however, rental growth is expected to take its place and be the key driver behind further increases in land values,” David says.
“Whilst rising construction costs could place downward pressure on land values, this will be largely offset by the forecast rental growth across the Western Sydney market.”
For more information on Colliers, click here.
packers and movers bangalore
packers and movers bangalore near me
packers and movers bangalore cost
packers and movers bangalore to hyderabad
packers and movers bangalore price
packers and movers bangalore marathahalli
packers and movers bangalore to chennai