Colliers International has appointed industry professional Monica Velez to head up the company’s inhouse logistics and supply chain consulting service. Ms Velez is based in the Sydney CBD office and joins Colliers International from Asahi, where she was the company’s supply change transformation manager for just over two years. She spent the previous five years working at CEVA Logistics in a variety of roles. “We are thrilled to welcome Ms Velez to Colliers International to lead our logistics and supply chain consulting specialisation, building on our extensive expertise for industrial occupiers,” said Doug Henry, managing director of occupier services at Colliers International. “Over the past 18 months, the Australian industrial landscape has changed significantly, with increased real estate prices, upward pressure on rent and the entry of global players, such as Amazon, into the local market. Now more than ever, organisations must look at their supply chain network and identify where the gaps and opportunities lie.” “I am excited to join Colliers International and work with industrial clients to ensure they continue to achieve elevated portfolio optimisation and maximised efficiencies,” said Monica Velez. “As the industrial landscape becomes increasingly dynamic, a strong logistics capability is essential for occupiers to increase optimisation, productivity and speed to market,” Ms Velez said.
In March 2017, Colliers Research undertook an investigation into Sydney’s industrial land supply. The paper provided the number of years of industrial land supply left as well as a projected amount of land when factoring in ‘potential future employment land areas’. Comparing the last paper (which used 2016 data) to an updated paper just published (using 2017 data), it indicates there is a net increase of industrial-zoned land supply within the Sydney Metropolitan Region, however, a decrease in the total area of available land yet to be developed (i.e. undeveloped zoned land) – a decrease of around 113 hectares. Between 2016 and 2017, there has been a net increase of 123 hectares of industrial zoned land – mainly due to rezonings. Over 200 hectares of industrial land was gained as a result of rezoning for industrial uses in 2016, including Moorebank (157ha), Mamre West in Penrith (47ha), and Cudgegong Road Station in Blacktown (28ha). Over the same period, just over 60 hectares of employment land was lost due to rezonings to alternate use – particularly within the North West, Central West, South, and North sub-markets. According to the NSW Government Planning and Environment’s Employment Land Development Monitor, there is a greater concentration of industrial zoned land (developed and undeveloped) within the North West and South West sub-markets (representing a combined 59 per cent of the total Sydney Metropolitan Area). The North and Inner West sub-markets’ share of industrial zoned land is only 3 per cent and 4 per cent, respectively. Although the South sub-market is regarded as one of the most constrained market with respect to land supply, the lack of supply is experienced within the ‘inner’ South area (i.e. encompassing areas such as Alexandria, Botany, Mascot, Banksmeadow, and Rosebery). There is extremely limited scope for development, with only 8.6 hectares of undeveloped land (all of which is unserviced). As of 2017, the Banksmeadow industrial precinct lost all its undeveloped serviced land supply. The Sutherland Local Government Area (‘outer’ South region), on the other hand, holds around half of the South sub-market’s land supply (or 530ha) with large scope for industrial development (113ha of undeveloped land). Between the period 2008 and 2016, the average annual take-up rate of industrial land was 157ha (lowest level equating to 105 hectares per annum and highest level recorded at 264 hectares per annum). Most of the land take-up was concentrated in the western sub-markets over the period. Supply / demand gap In order to determine the future demand for land, the average historic land take-up rate has been applied (i.e. 157ha per annum). This average will be considered the ‘base case’. A ‘high case’ and ‘low case’ of 264 ha and 105 ha per annum (based on the highest and lowest take-up recorded over 2008 to 2016) scenario has also been considered to deduce a range in the years of supply left. Given that there is currently 663ha of undeveloped serviced land, and taking into account half of the undeveloped unserviced land (i.e. 1,076ha) equates to 1,739 ha of total land supply. Note: Only half of the total undeveloped underserviced land has been added to the total supply calculations in order to take into account land required for roads, infrastructure requirements and environmental considerations, as well as possible future planning changes to alternate uses (such as residential, retail, commercial land uses). In addition to undeveloped land, taking into account around 30 per cent of the total area set for future employment land release (i.e. 1,996ha) equates to 3,735 ha of total land supply.
The Melbourne-to-Brisbane Inland Rail project is anticipated to transform the movement of freight around the country and significantly impact industrial property, its users and providers across regional Victoria, New South Wales and Queensland, as found by research carried out by commercial real estate company, Colliers International. According to the findings of the Colliers Radar: The Melbourne – Brisbane Inland Rail report, the 1,700km Inland Rail project – planned for completion in 2024/25 – is expected to result in potential creation of new intermodal facilities and transport and logistic hubs in key strategic locations; the relocation and/or emergence of inter-capital freight users to key strategic locations; potential uplift in industrial land values for precincts in proximity to the rail route (occupier-led demand); and higher importance placed around the existing Ports of Brisbane and Melbourne. “From commercial property perspective, the regions which are most likely to benefit from the completion of the Inland Rail are Darling Downs, Acacia Ridge and Bromelton in Queensland, Tottenham in Victoria and Parkes in New South Wales,” said Malcom Tyson, Managing Director – Industrial, Colliers International. “We are likely to see increased activity along the Inland Rail route from the inter-capital freight users such as Linfox, CEVA Logistics, Toll Holdings, DB Schenker, DHL, Woolworths, Coles, GrainCorp, Bluescope and Visy.” Tyson noted that the benefits for these users would range from operating cost savings, time savings, improved reliability, improved availability and resilience to incidents. “In line with this, providers of the intermodal transport and logistic hubs and industrial estates may also emerge to cater for the increased demand and relocation requirements from these users,” he added. “These providers might fall into service industry sectors such as cold-store warehousing, grain and commodities storage, rail maintenance, container park, food processing facilities, freight handling facilities, distribution centres and inland container storage facilities.” Matthew Frazer-Ryan, National Director – Industrial, Colliers International, added, “There is compelling evidence pointing towards the positive correlation between new infrastructure projects (i.e. when committed and under construction) and associated uplift in industrial land value in a region. “The importance of these projects to improve accessibility of freight to the area is also likely to positively impact on the potential rental value of the industrial property in the region.” Frazer-Ryan added that this has been evidenced Melbourne during the CityLink Tulla Widening project and the beginning of the West Gate Tunnel project – directly impacting transport and logistic operators in the region and leading to an uplift in values. In Brisbane, he added, this was evident with the completion of the Gateway Upgrade, which saw land values in the Australia TradeCoast rise upon announcement of the project. In Sydney, the Westlink M7 Motorway construction saw average annual land value growth in the M7 catchment area of around 22 per cent over the three-year period. “As a result, we would anticipate that as firms begin to look to these middle suburban ring and outer regional areas supported by the completion of the Inland Rail, stronger demand should lead to increasing land values and overall industrial property performance over the long-term,” added Frazer-Ryan.
Property developer Mirvac Group has announced the commencement of construction on ‘Building 3’ at the Calibre industrial estate at Eastern Creek, Sydney, with the office and warehouse facility being delivered on a speculative basis. The building will offer workspaces between 6,000 and 20,000m2 from December 2017. The company noted that a key driver for the delivery of Building 3 has been the increasing growth of e-commerce or ‘eTailing’, a movement fuelling the uptake of industrial property in Australia. “Industrial leasing activity to retail tenants within Western Sydney is tracking at approximately double the 10-year average since the beginning of 2016,” said Fabian Nager, Development Director – Office and Industrial, Mirvac. “As demand rises for online goods and services among the Australian population, e-commerce businesses are looking to secure strategically located, functional and flexible warehouses to improve operational efficiencies and future-proof their businesses. “Building 3 has been designed for the evolving nature of the industry, with a focus on occupier amenity and enabling the use of current and future logistics technology. We have included a number of key future proofing initiatives, such as concrete floors that are capable of supporting nine tonne point loads, and a 20-metre cantilevered awning spanning the length of the building that will maximise all-weather functionality.” Gavin Bishop, National Director – Industrial, Colliers, added, “Design considerations for modern industrial estates must include an increased use of robotic and mobile automation, greater cubic capacity and a quality indoor working environment. “The current demand for fast-moving, online retailing is driving a new level of sophistication in industrial facilities that are in close proximity to key infrastructure, with market-leading technology, high levels of amenity and advanced operational specifications. The construction of Building 3 at Calibre responds to this trend and will offer a premium solution for a corporate headquarters and warehouse facility or a third-party logistics provider.”