Investors circle $100m industrial development land in Sydney's west
Investors are lining up to view a significant development land parcel in Sydney’s west that will give them a foothold into one of the most tightly held markets, with price expectations of around $100 million.
The 41.32-hectare block of land at Lot 10 in Austral is said to be the largest ever land parcel to hit the market in the suburb and is being sold by Hellenic Village through Colliers. It has the opportunity for potential buyers to masterplan an entire estate thanks to its flexible zoning.
The Colliers team of Joe Sacco and Frank Oliveri said zoned sites of this size in established areas are very rare in the current market.
The zoning of the site is almost 60 per cent Low Density Residential, with the other portion made up of RU6 – Transition, SP2 – Infrastructure, RE1 – Public Recreation and C2 – Environmental Conservation.
“Given the size and diverse offering of the site we expect buyer interest to be incredibly strong and (to) come from a wide range of developers from both interstate and international,” Sacco and Oliveri said.
“The scale of this Austral site offers significant future development pipeline that can be built to meet market conditions over the short, medium and long term if desired.”
The agents said the property presents an opportunity to capitalise on a major growth suburb leveraging off the connected amenities, ongoing infrastructure development and surrounding economic growth of the region.
South-west Sydney is experiencing unprecedented growth, with a population of more than 1.5 million expected by 2036.
On top of this, a forecast of about $3.6 billion is due to be spent by local, state and national authorities within the region, including on the future Western Sydney Airport and surrounding Aerotropolis.
“Both the Austral and Leppington North precincts have been highly sought-after due to recent rezoning by the NSW government, which will allow for urban development,” Sacco and Oliveri added.
The rezoning will provide enough land for about 17,350 dwellings that will potentially house more than 54,000 residents.
Industrial property also remains a sought-after sector in Sydney’s west with very limited supply and high demand.
UBS analysts said they have a “consistent favourable view” on logistics across the Asia Pacific region as excess rent growth will deliver excess stock returns in 2023.
“Logistics is our preferred sector given historically high rent growth and record low vacancy,” the UBS analysts said.
Colliers managing director industrial and head of industrial capital markets said the Australian industrial and logistics sector continued to show its strength throughout 2022 despite growing economic uncertainty and a repricing of assets.
“Investment volumes reached $7.9 billion for the year, which is the second-highest annual volume on record,” Bishop said.
“For 2023, asset pricing will remain the key theme. However, with rents growing at six times the long-term average, the sector is well placed to weather the uncertainty.”
He added that once interest rates and funding costs stabilised, the capital sitting on the sidelines would re-enter the sector, and that another strong year was anticipated.
Vacancy rates also fell throughout the year and average 0.6 per cent nationally, while leasing numbers exceeded 4.85 million square metre, which set a new record. Prime rents grew by 21.6 per cent on average nationally – over six times the 10-year annual average of 3.5 per cent.
