Investors help drive demand for Western Sydney warehouses, says Raine & Horne Commercial

Underlying investor confidence set to underpin Sydney’s industrial markets in 2011
Continuing enquiry demand for prime warehouses between 5500 and 20,000 square metres following recent prelease transactions
A-REITs with internal funding available have identified prime industrial stock on motorways as the way forward to produce secure industrial investments.

In an excellent sign for the prospects of Western Sydney, leading commercial property firm Raine & Horne Commercial (Homebush) reports that institutional investors are bringing new buildings onto the market on a speculative basis with the view to producing quality assets and supply the market demand which has been evident.

“With the current trend for warehouses of this size continuing, A REITs in particular have been showing a keen interest in industrial warehouses to develop between 5500 square metres and 20,000 square metres in key industrial locations across western Sydney, such as Eastern Creek, Greystanes and Erskine Park, where access to the Sydney Orbital network is available,” says Thomas Muller, Director of Raine & Horne Commercial Homebush,

Mr Muller said supply of stock in this calibre demonstrated the continuing appetite for industrial investments in these existing industrial areas of western Sydney was also a consequence of the current levels of pre-lease competition.

“The charge is being led by Dexus Property Group and Australand, who have developed or have in planning primary warehouses over 20,000 square metres,” Mr Muller said.

“These buildings are being produced purely on speculation, which provides the market with more options for this style of offering outside of pre-leases which are well catered for.

“As a result, owner-occupiers are being attracted by the potential to move from out-dated buildings into brand new premises."

Higher internal warehouse clearances with increased cubic capacity and lower waiting times for completion, as seen with preleases, bring major appeal with Western Sydney industrial sites, while enhanced movement efficiencies for trucks both on the premises and onto major motorways are also attractive, Mr Muller said.

“In addition, the reduction in Western Sydney land prices compared to pre-GFC levels, as well as population growth in the south-west and north-west regions of Sydney, ensures suppliers and users of industrial property are maintaining an interest in the region driven through the logistics sector.”

In addition, Mr Muller said institutions with access to finance and seeking a way to grow were considering building industrial facilities the best way forward.

“Speculative building of prime industrial assets is in the sights of developers such as Dexus Property Group, Goodmans and Australand. Dexus in particular have access to funding and are ready to move,” he said.

“Consequently, these organisations are looking to lease warehouses to transport/logistics companies who have contracts to warehouse and transport goods from the major retail chains and importers.”

Raine & Horne is an iconic Australian property firm, with more than 360 offices worldwide. Also an established Superbrand along with Qantas, Vegemite, Woolworths and Myer, the company has four distinct property service brands including Raine & Horne Residential, Raine & Horne Commercial, Raine & Horne Rural and Raine & Horne Financial.

-ENDS-

For further media information contact:

Thomas Muller, Director Raine & Horne Commercial Homebush on (02) 99719000 / 0409 469628

Kit Bashford, National Marketing & Communications Manager on 02 9258 5400