New leader for industrial property L&SC division

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.
 
 

Kaufland/Lidl: German retailer to spend $450m on new DC

Kaufland, one of the world’s largest supermarket chains, has confirmed it will open its first Australian distribution centre at Merrifield Business Park in Melbourne’s north.
The supermarket chain has purchased a large 28-hectare site on which it plans to construct a 110,000 square metre purpose-built distribution centre that will service their stores.
The facility will be one of the largest of its kind in Australia and feature extensive temperature controlled storage, the latest automated warehousing with a 40 metre high-bay storage as well as a 3,600 square metre office. The total investment in the facility is upwards of $450 million.
The facility is expected to bring an additional estimated 600 jobs to the local area upon completion.
The retailer, which is owned by Schwarz Group, the fourth largest retail chain in the world, selected Merrifield Business Park due to its strategic location on the Hume Freeway and proximity to Melbourne.
It is the fourth major deal for MAB Corporation and its partner Gibson Property Corporation at Merrifield Business Park, with Kaufland joining Dulux, D’Orsogna and Steritech in Victoria’s largest business park.
A Kaufland spokesperson said: “Our new state of the art distribution centre at Merrifield Business Park will be the company’s single biggest investment in Australia and enable  Kaufland’s expansion. Merrifield was selected for its strategic location and ability to cater for future expansion of the facility.”

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Snack Brands to anchor $400m Sydney site

Universal Robina Corporation-owned Snack Brands Australia has committed to both a pre-lease facility and adjacent land sale for a site area of 10.42 hectares in Erskine Park with Altis. This new commitment as part of their supply chain transformation with consultancy firm TM Insight, is one of the largest industrial property deals in the last 12 months.
The 30,255 square-metre pre-lease facility, located on First Estate Mamre Road Erskine Park, will be situated on land four times the size of the Melbourne Cricket Ground and have an end value in excess of $400 million.
The new state-of-the-art distribution centre will transform the supply chain network for the iconic snacks company whose brands include CC’s, Thins, Kettle, The Natural Chip Company, Cheezels and Jumpy’s.
The pre-lease facility will comprise a significant 35-metre high-bay section to the building and is being developed with leading-edge technology to create an automated warehousing and distribution system.
Supply chain director at Snack Brands Neville Tapp said: “This facility will support our growth strategies and enable us to enhance our customer service at the lowest possible cost.  We are excited about working with Altis and the team at TM Insight to deliver this project over the coming years.”
Global supply chain and property consultancy TM Insight worked alongside Snack Brands in the development of the concept plan for the new site. After understanding the business case metrics, TM Insight ran the property procurement process and will be project managing the delivery of the new facility.
Director of TM Insight Travis Erridge said: “This is a significant step forward for Snack Brands in efficient operations for its customers.
“Snack Brands is investing in its future with a world class facility and has looked at all options to determine the best solution that meets both their current and future distribution requirements. Property specifications were found on the back of a robust business case and operational design completed inhouse.
“TM Insight developed the business case, ran the property procurement process and will also project manage the build. This end-to-end service ensures Snack Brands have a partner throughout the process that will make certain the facility is delivered to its highly technical specifications with the integration of automation in the building structure,” he said.
Stage one of the development will be operational in Quarter 4 2020.

Western Sydney Airport selects architect to develop business park

Western Sydney Airport has appointed Architectus to plan a business park on a dedicated 191-hectare parcel of airport real estate.
The business park will offer the opportunity to integrate office, retail, industrial, hotels and conference facilities within 1.5 kilometres of the airport terminal.
“There will be opportunities for businesses to be at the terminal’s doorstep at what will become Australia’s largest international gateway. When the Airport opens in 2026, it will be built for 10 million passengers a year, but we’ve got a blueprint for staged growth to become one of the world’s biggest airports in the decades to follow and our business park will be a key feature,” Graham Millett, CEO, Western Sydney Airport said.
Graham said he expects interest in the Airport’s business park to come from a range of different industries.
“Consultants, tech companies, defence and aerospace, airlines and pharmaceutical are just some of the industries that would enjoy considerable advantage being located at the Airport’s front door,” he said.
Master planning work on the Airport business park is expected to be complete in mid-2019. Work to build Western Sydney Airport began in September, with the business park set to open before Airport operations begin in 2026.

$55m Hammond Business Park completed

Vaughan Constructions has completed the $55 million, 81,000sqm Hammond Business Park at Dandenong South with a deal worth more than $8.5 million to construct a new purpose-built facility for promotional products supplier Dex Collections.
The completion of the estate came with a flurry of design-and-construct deals negotiated by Vaughans over the last six months on the back of a critical shortage of industrial land and buildings in the south-east industrial market that has driven a significant escalation in land values.
Vaughan’s development manager in Victoria Chris Telley said the south-eastern market was experiencing the greatest lack of quality industrial buildings in a decade, a shortage that had been exacerbated by a lack of available land.
“As a stronger Victorian economy moves into a higher gear, driving manufacturing and logistics industries, and as residential demand continues to grow and take industrial land, we face even greater shortages – particularly around the key transport nodes and especially along EastLink, and that’s going to mean ongoing upward pressure on land values,’’ Mr Telley said.
He said Dex Collections would take advantage of the first rate road transport links that the estate offered with quick access to Eastlink.
“The location, together with the modern warehousing facility, should deliver significantly enhanced operating performance across the business,’’ Mr Telley said.
The purpose-built facility will comprise 4,905 square metres of office, showroom and warehouse space, concrete hard stand, a loading yard and 74 car spaces on a 13,031 square metre site on the corner of Hammond Road and Rodeo Drive.
 

Toll to open ‘super depot’ on the Gold Coast

Hot on the heels of its $311m Bass Strait investment, the Toll Group has announced plans for a new multi-purpose super depot on the Gold Coast.
The 10,250sqm depot will bring together three existing sites into one operational hub, the first purpose-built integrated facility of its kind for Toll.
Toll Group managing director Michael Byrne was joined by developers LOGOS and Partners Group this morning to officially break ground on the site at Captain Cook Drive, Arundel.
Custom-built for Toll, the new super depot will bring together multiple freight services under one roof that are traditionally separated due to their operational requirements.
The outcome will be a seamless freight service to customers. From medical supplies, to fashion, food and machinery, will all be able to be delivered from the Gold Coast to Australia and the world.
Mr Byrne said this investment underlines economic confidence in the state and a strong belief in the future growth of Toll’s business.
“We have a strong vision for Queensland and Toll is making a substantial investment on the Gold Coast with this new state-of-the-art facility.”
Mr Byrne said while the new super depot will set the blueprint for how the company will build future integrated operations in Australia, it also takes the best learnings from other facilities that meet the highest safety standards.
“The new depot has been designed to provide the safest working environment for our people and customers,” Mr Byrne said.
“We’ve purposely limited the interactions between pedestrians and forklifts, customer collections will now be separated from operations, and operational traffic will flow in one direction, which means no reversing and less risk.”
Mr Byrne said the site at Arundel on the Gold Coast had been chosen to provide the optimal location to minimise distance and time travelled between the depot and customers.
With its immediate access to major arterial routes throughout southeast Queensland, Arundel is ideally positioned to enable Toll to service its diverse range of customers from retail to mining to agriculture.
Toll will employ over 120 Gold Coast locals at the new facility. Construction including internal fit-out of conveyor and sortation systems is scheduled for completion by end April 2019.
Toll’s three existing sites, at Molendinar, Arundel and Burleigh Heads will stagger their relocation until the end of July 2019.
 

Where will you find industrial land in Sydney?

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.

Logistics land by the millions: $500m capacity launched

LOGOS announced the development of this purpose built warehouse distribution facilities at the Prestons Logistics Estate, Sydney for Toll Group in 2016.

Industrial real estate financing firm LOGOS is establishing a new ‘core / core plus’ venture, LOGOS Australia Logistics Portfolio (LALP) with a leading Australian investor.
The strategy of LALP is focused on acquiring and owning high-quality core and core plus logistics facilities in prime industrial markets, predominantly along Australia’s eastern seaboard. It will initially have approximately A$500 million of investment capacity. LOGOS says it has identified a strong pipeline of acquisition opportunities and the significant commitment reflects LOGOS’ and its investment partner’s confidence in the opportunities available and performance of the logistics market in Australia.
Joint managing director of LOGOS Trent Iliffe said: “We are pleased to be partnering with a leading Australian investor on this new venture. We will be looking to acquire existing assets and aggregate a premium portfolio with long leases to high quality tenants, with value-adding upside.”
Joint managing director of LOGOS John Marsh said: “The Australian logistics market has continued to deliver solid returns over the past three, five and ten years and we expect this performance to continue, with the sector experiencing strong demand driven by trade flows and growth in online retailing.
“Given Australia’s growing exposure to online retailing, and our experience across a number of Asian markets that have experienced significant online retail growth, we’re excited to be able to bring our learnings from these markets and adapt them to Australia’s growth story,” he said.
LOGOS now has A$4 billion of equity commitments to 14 ventures across its five regions with target assets under management of over A$9 billion.
 
 

Mirvac constructing new Sydney industrial facility

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.”
 

Goodman Group welcomes rising consumer expectations

Goodman Group has announced its results for the full year ended 30 June 2017, delivering an operating profit of $776 million, up 8.6% on FY16.
Goodman, an integrated commercial and industrial property group, owns, develops and manages real estate including warehouses, large-scale logistics facilities, business parks and offices globally. It is the largest industrial property group listed on the Australian Securities Exchange.
Commenting on the result, Greg Goodman, CEO, Goodman Group, said, “Our FY17 operating profit of $776 million is the result of strong operational performance and the deliberate repositioning of our business over the last three years.
“Having positioned our business to take advantage of structural changes, we’re now looking to the future. Rapidly advancing technology and increased consumer expectations around price, product availability and delivery – while disruptive for some businesses – are providing us with opportunities.
“Although the evolution of e-commerce and supply chain transformation are still in their early stages, we are seeing increased demand for our expertise in providing high-quality logistics facilities in prime locations. This is a trend we expect to accelerate over the next five to ten years.”

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