A single development has collected $15 million of pre-sales in May, in unprecedented interest in South Sydney industrial strata assets according to Commercial property firm CBRE.
The sales were racked up for the Precinct 45 project in Banksmeadow, a Ramsey Property Group development with 57 units across separate workspace and industrial zones.
May’s sales accounted for 35 per cent of the available stock, with more than 85 per cent sold ahead of the completion of construction at the end of the year.
Owner occupiers are outnumbering investor buyers at Precinct 45, on a 3:2 basis.
CBRE say demand is not contained to Banksmeadow, with industrial strata within the 8km radius of the Sydney CBD and Port Botany highly sought after amid a boom in e-commerce and last-mile delivery.
William Gathercole, CBRE’s Head of South Sydney Industrial, says owner occupiers and investors alike are looking for value after the uncertainty of 2020.
“I’ve never seen the industrial strata market this buoyant in South Sydney, and we expect this surge to continue due to the low-interest-rate environment and limited amount of industrial supply available,” says William.
“Owner occupiers are purchasing rather than leasing as it is now cheaper to buy than rent, and buying also opens up repositioning and investment opportunities down the track.
“Investors, meanwhile, are chasing the 5 per cent yields that industrial property can offer in comparison to the 2 per cent you may achieve when investing in residential, while the lack of supply in South Sydney means it’s easy to find tenants even as rents continue to rise.”
36 units at the Base Alexandria development are now on sale ahead of completion at the end of 2022.
The development from Made Property, opposite Sydney Park and just off the WestConnex interchange on Euston Road, within a suburb that was once Sydney’s industrial heartland but has evolved into a broader business hub.
Isabel Ross is managing the sales campaign for the site, and says South Sydney is now better connected to the rest of Sydney than ever before.
“Small businesses are looking to re-establish themselves and the lack of industrial land in South Sydney means Base Alexandria is set to be one of the last, brand-new strata opportunities for owner occupiers,” Isabel says.
For more information on CBRE, click here.