News & Media

SYDNEY INDUSTRIAL MARKET COMMENTARY by Gregory May

Recently, the Sydney Industrial property market has been the focus of much interest. It seems to be running hot both from Investor and Occupier perspectives.

Why is this the case? The reasons are manifold, but I shall try to elucidate.

Firstly, we have seen a significant diminution of established industrial stock especially near and around the City of Sydney and Sydney Airport, due to re-zonings for residential use & high density development.

Secondly, the growth of online markets has created an urgent need for fulfilment and distribution facilities, which has driven a spate of new construction predominantly in Western and Southern Sydney particularly around the motorways. Existing big business are also very closely looking at their supply chains and re-working these, which is creating a demand.

Thirdly, the ever changing business environment and the uncertainty of reliable employment opportunities, has seen the rise in new small business start-ups. This has also been fuelled by the immigration of enterprising business people to our shores, who see new opportunity here and a chance to use their skills and capital to make a new life.

Fourthly, technological advances in manufacturing, warehousing and processing systems  has created a demand for different types of industrial space. Higher floor loadings, higher under truss clearances, larger clear span areas combined with better on site facilities such as fast food outlets , child care, medical services, gymnasiums etc. The coming of artificial intelligence to industrial activity will undoubtedly create further demands in this sector.

Investors, particularly the Property and Investment Trusts seem to have a strong appetite for industrial property. Recently, Stocklands announced that they would be selling retail assets to focus on more industrial development and investment.

The small business has also realised that buying their own premises is not only viable, but also enables them to control their business overheads, whilst often providing a solid superannuation investment.