The Sydney industrial market is experiencing unprecedented demand from tenants looking for new space as transport and retail occupiers look to strengthen their supply chains.
Real estate experts Colliers’ latest report has found demand for industrial land in Sydney’s West has continued to soar as more institutional groups adopt a build-to-core strategy.
The update finds yield compression and limited buying opportunities are prompting several groups to seek scale through development.
David Hall, National Director of Industrial at Colliers says there is 1,997 hectares of net developable industrial land in Western Sydney available in the next five years.
64 per cent of the available space is owned by privates or government departments.
“Looking ahead, we expect take-up levels to well exceed historical levels given the increased availability of land as a result of the development within the Mamre Road Precinct,” David says.
The report notes the Mamre Road development will lead to more hyperscale sheds in the area.
The Western Sydney Aerotropolis is a proposed high skill job hub and economic centre which will provide 2,000 to 2,500 hectares of land for industrial use.
Luke Crawford, Director of Research at Colliers says Sydney has been unable to accommodate hyperscale requirements in the past, but this is changing.
“The delivery of larger facilities (net lettable area of more than 40,000 sqm) has been a growing trend in Melbourne in recent years and we expect these types of developments to become more widespread in Sydney,” Luke says.
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