Whether its access to quality labour, reduced transport costs, full omnichannel capabilities, sustainability goals or a need to be closer to residential and commercial districts, a new warehouse development in South Western Sydney has it all covered.
The industrial retail landscape is changing dramatically, and logistics and warehouse capabilities are playing an ever-more crucial role in overall operations.
With online shopping continuing to boom, having the ability to be closer to the consumer is a major priority for logistics providers and retailers as they seek to gain significant efficiency and cost savings.
As transport continues to be the largest cost to a logistics provider, demand for industrial property in Australia’s greater metropolitan areas is at an all-time high.
There is more pressure than ever on logistics providers and retailers to offer faster delivery times to their growing online consumer base and this dramatic change in consumer behaviour is developing a trend towards seeking warehouse space closer to the major commercial and residential hubs.
With the last mile causing logistics and retail companies with their most challenging pain point, strategically locating warehouse space can offer solutions to some of these issues.
A new development in South Western Sydney is set to provide a rare opportunity for organisations looking to expand or relocate their warehousing operations closer to Sydney’s CBD.
Located at Bankstown Airport, Altitude is a centrally located logistics hub comprising of 162,000 sqm of warehouse space across 40 hectares.
Construction on the site started in early April 2020, and the first tenant are on track to move in at the beginning of Q1 2021.
Kirby, one of the largest refrigeration and air-conditioning equipment OEM and HVAC&R wholesalers in Australia, is the first tenant to sign up to the facility.
“Kirby has committed to a 10-year lease across 22,000 square metres, this includes 1,400 sqm of office space and will be used as Kirby and Beijer Ref’s Australian headquarters,” says Joseph Ajaka, Project Director at Altis Property Partners, the development manager to Sydney Metro Airports.
Getting closer to the consumer
Forty-five per cent of Sydney’s population is within a 30-minute drive of this new premier industrial precinct.
“On completion, Altitude will be the most centrally located warehouse development of this scale in Sydney with direct access to the M5 motorway,” Joseph says.
The site offers access to major arterial roads, linking the site to all major hubs across the Eastern Seaboard. Additionally, Bankstown Airport provides tenants the unique benefit of direct airside access.
The site is also located close to the Moorebank Intermodal terminal, which Joseph sees as complementary to what Altitude has to offer. “Whether you need to move any goods by freight, air or rail or just need to get closer to residence and labour pools of Sydney, Altitude has it all.”
A warehouse fit for the future
According to Sydney Metro Airports CEO Daniel Jarosch, the Altitude Precinct at the southern gateway to Bankstown Airport has been designed for the logistics and warehousing requirements of today and will service those well into the future.
“We’ve seen a huge trend towards the hub and spoke model, and we think this is one of the few facilities in Sydney that can offer this,” Daniel says.
A hub and spoke model is a decentralised distribution system, where goods are processed and then shipped to smaller stores or pick up spots, or directly to the customers.
Many major retailers are exploring these kinds of solutions as they adapt their model and explore opportunities to increase capabilities around e-commerce and servicing the online customer.
“With online shopping penetration continuing to grow, this kind of model will be crucial as businesses adapt to a sustainable and efficient way of offering short delivery times,” Daniel says.
The Altitude precinct is also unique in that it will be home to an amenity hub, with supermarkets, cafes, food outlets and accommodation.
“This site not only benefits from schools, supermarkets and major public transport access within 5 kilometres, we have also allocated 10,000 sqm for a mixed-use amenity-based development, which will service both the workforce based at the site and the local community.”
Additionally, Daniel is proud to report that the site will provide the local community with more than 2,000 jobs both during construction and on completion of the facilities.
With the increase of more convenient delivery options like click and collect, the warehouse of the future is set to feature a customer-facing element, with access points for consumers to collect and even browse goods. The Altitude precinct offers those customers an attractive destination, as well as a destination for the local community and workforce.
As the site features flexible zoning, it lends itself very well to the warehouse showroom style property that, according to Joseph, we are sure to see more of in the coming years.
This also makes the facility a smart option for organisations who are looking to consolidate their office and warehouse operations, which is what Kirby has decided to do with its new property at the site.
“We are seeing a big push towards organisations combining their head office with warehouse operations. Altitude allows our users to locate their head office onsite and we have ensured that the offices are designed to meet the highest corporate standards. There is plenty of local amenity options, so we know this will be an attractive place to work,” Daniel says.
Being so close to a highly populated area of Sydney also provides access to a large labour pool. For Daniel, this is an added benefit for the employees who will work at the site. “We are located very close to a large portion of Sydney’s labour pool, so this saves employees having to travel into the CBD or to the outer ring of Western Sydney.”
Room to grow
Construction is currently taking place at this new site, and the first tenant will move in at the beginning of Q1. After that, the next available building will be from Q3 2021.
Altis Property Partners is discussing opportunities with multiple tenants across the entire space and will consider tenants who are looking for upwards of 10,000 sqm.
Ideal for blue chip logistics companies, TM Insight’s Supply Chain research found that the site offers transport savings of up to 30 per cent. “These calculations are based around the fact that we are right in the centre of Sydney, usually sites of this size and calibre are more than 50km out of the city. The reduction in transport and toll costs can offer our tenants significant savings,” Joseph says.
A major priority for Sydney Metro Airports and Altis Property Partners was to make sure the site met environmental, social and governance goals.
The first building will be a certified 5-star green star building, which includes 250-kilowatt solar panel installation, and a 50,000-litre rainwater harvesting system.
Altis Property Partners has also recently completed a similar A-grade logistics and warehouse hub at First Estate in Western Sydney’s Erskine Park.
For more information, visit: www.altitudeindustrial.com.au.