CBRE agents John Micallef and Matthew Alessi along with Macquarie Commercial’s Luke Belotti have been managing the launch of the new multi-billion-dollar Nepean Business Park in Sydney’s Penrith. They reveal to MHD how this long-term development is providing much-needed supply to industrial and logistics enterprises.
As demand for industrial assets from buyers, tenants, and investors remains high, supply continues to remain at an all-time low as vacancy rates in Sydney’s South and West have decreased to a global record of 0.2 per cent.
This is why one of the largest small-lot industrial subdivisions in Western Sydney will generate up to $2 billion in economic activity and is set to alleviate the pressure and stress as it’s gradually being launched over the next three to five years.
Nepean Business Park will occupy a 49-hectare former quarry site near the Sydney International Regatta Centre. Australian-owned private family investment office Precinct Capital appointed CBRE’s John Micallef and Matthew Alessi together with Macquarie Commercial’s Luke Belotti to manage Stage 1 of the launch.
The estate will consist of 93 small to medium lots ranging in size from 2007 sqm upwards, which are expected to gain considerable interest from owner-occupiers as they search for premises to purchase. Other amenities in the Park will include open spaces, public art, pedestrian and cycle links, and a community hub.
CATERING TO BUSINESSES OF ALL SIZES
With an increased volume of industrial stock on the market, John, Matthew, and Luke hope that this will alleviate the pressure in Western Sydney. One of the benefits of this gigantic site, is it will generate many jobs for locals and stimulate the area’s economy.
“Nepean Business Park will offer lots that cater for small and medium businesses,” says John Micallef, Director at CBRE. “This market is severely undersupplied, and we have not seen any substantial new stock for an extended period.
“This has led to large rental increases and occupiers struggling to find premises. We have an influx of small businesses looking to own their own premises, which Nepean Business Park will cater to, and we also expect strong engagement from investors given the market’s strong underlying fundamentals.”
“Nepean Business Park is exactly what Western Sydney needs,” explains Luke Belotti, Director at Macquarie Commercial. “There’s simply been ongoing demand and little to no supply.”
Matthew Alessi, Manager at CBRE, adds that the project is unique, and the site will cater for small-to-medium businesses (SMEs), not just large enterprises.
“The zone is flexible,” continues Matthew. “It will accommodate not only industrial owner-occupiers, but other uses are allowable including community facilities and offices. The affordable pricing also makes it an attractive offer. On top of this, it’s close to major motorways and core locations like Eastern Creek, Wetherill Park, and Prestons.”
The site will consist of various-proportioned allotments and strata developments to cater to businesses of all shapes and sizes, from sole traders to larger enterprises needing corporate headquarters. Stage 1 has just launched with lots ready to build on from Q4 2024.
Construction costs will be kept low due to the way the developers have built the business park. Individual lots will be sold serviced and benched and do not require onsite detention basins due to a centralised stormwater system, while the development will also feature a centralised fire hydrant booster system and fire sprinkler tanks and pumps. The lots also have access to ample incoming power.
CONNECTING THE OUTER WEST
Most of the lots already have CDC building approvals. “Once a buyer has settled on a lot, they can build immediately,” notes Matthew. “This will allow them to save both time and money.”
Luke says these premium subdivision lots will benefit from other high-quality infrastructure which will be provided by the developer, proving these aren’t your run-of-the-mill industrial developments.
“Penrith will benefit enormously from the Western Sydney Airport, which is due to open in 2026. Recent upgrades and extensions to the road network and the new metro which will connect Penrith with the airport will greatly improve access to and from the area
“This will make it more accessible. The general population in this area warrants a park of this quality and size. It will allow businesses and employees to work closer to home. It’ll also help build the local economy, and this will feed back to the businesses.”
The long-term goal is to connect the new Western Sydney Airport to the M7 to make it easier for anyone travelling between North West and South West Sydney, including Penrith.
Buyers can start securing the lots now and begin building on them as soon as November 2024.
MAKING INVESTMENTS MORE AFFORDABLE
With the Nepean Business Park’s many subdivided allotments becoming available soon, an increase in supply will be possible to meet the ever-rising demand from prospective owner-occupiers and tenants.
“The business park will cater for businesses of all sizes and requirements which will ensure the market demand for industrial property will be met,” explains Luke.
“This in turn should result in a stabilisation of rental rates. The developers have met the market with price, and with the construction cost savings already built into the development, investors should be able to achieve a great return on investment.
“This is a long-term project and development. There’s going to be multiple stages coming on the market over the years – it’s not going to be achieved in one go. The developers want to keep the quality high and gradually release it to market.”
Both Luke and Matthew say the response to the launch has been “brilliant” and “far exceeds” what they were expecting – showing there’s a huge demand for these smaller allotments.
“We’ve only brought a small portion to market so far,” adds Luke. “This development will feed the market for the next three to five years. With the airport opening in a couple of years’ time, there should be all the necessary services and demand to support this new precinct.
“There are still some subdivisions available in the South West corridor like Marsden Park, Oran Park, and Gregory Hills, but none of these can compete with the scale of Nepean Business Park.”
Luke adds that industrial and logistics sites are organically pushing further west because there’s a lack of stock closer to Sydney’s CBD and to the M4 and M7.
“Leasing and selling rates reflect this, too,” explains Matt. “Going back to your core locations, rentals are now almost $300 a square metre in some cases.
“Penrith is still affordable with rents at $200 a square metre and selling rates far less than what the core locations are seeking and demanding, so it makes it more appealing to the market.”
For more information on Nepean Business Park, click here.
For more information on CBRE, click here.
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