New South Wales Commercial & Industrial Property Market Review - March 2022
Despite the 2021 challenges many faced, the Sydney Industrial Market remained remarkably resilient. Demand outstripped supply across all Sydney metropolitan markets, both with leasing and purchasing.
Take up of space on the leasing front has occurred at a rapid pace as companies increase inventory due to ongoing supply chain issues. This has left some industrial markets with very few opportunities for tenants.
Rents are clearly on the increase and incentives continue to decline as supply remains tight. Capital values for both vacant possession & investment sales continue to increase, again due to an imbalance between demand and supply and of course, with the low cost of capital.
Some highlights for Link in quarter 1 included the following:
Settlement occurred over an ex-Officeworks site on Canterbury Road, Punchbowl. The 1,655 sqm prominent freehold showroom/warehouse premises on 3,650 sqm of land had development upside with DA approval for 62 residential units. The premises sold via EOI for $8M.
The sale of 7-11 Greenfield St, Botany, an older style factory in close proximity to the air and sea ports that sold for $8.35m through a hotly contested EOI campaign just prior to Christmas.
Leases were signed over 5,300 sqm at 1 Kellicar Rd Campbelltown at $140 psm gross.
Contracts were exchanged over a 1,940 sqm office/warehouse at Mount Kuring-Gai.
We expect the industrial market to remain strong, however we do believe the pressure of inflation and higher interest rates could cool the sales market and push potential owner occupiers back to the leasing market.
Our thoughts and best wishes are with those recently affected by the floods in NSW and Queensland. Link recently did their part by making a substantial donation to the Salvation Army to assist those in need and we hope this makes a difference in some small way.
“Demand outstripped supply across all Sydney metropolitan markets, both with leasing and purchasing.”