New South Wales Commercial & Industrial Property Market Review - November 2021
Our 2021 started optimistically in the knowledge 2020 was behind us and the feeling things can only improve. Despite the hardships of “delta” the economy proved remarkably resilient with mild growth in Q1 & Q2 2021.
From mid-year, we experienced a fall in enquiry levels across Western Sydney, mainly due to several Western Sydney LGA’s being in harder lockdown. The South Sydney market on the other-hand remained strong with stable enquiry levels. Both markets have been starved of supply in all size ranges, both for sale & lease.
Land sale rates have continued to increase sharply, as have capital values, mostly due to the low cost of capital and the imbalance between demand & supply. Some quick examples of this include - serviced blocks in Gregory Hills selling for circa $1,200psm and a 16,780sqm site in Kirrawee topping $1,700psm. Englobo land parcels in western Sydney are now achieving $400 to 500psm, whilst vacant possession sales rates achieving from $3,000 to $6,000psm in Western Sydney (size and location dependent) and approximately $7,000 to $9,000psm in South Sydney (again size and location dependent). Rentals are on the move and incentives in supply starved markets are falling, with landlords now having the leverage.
The 20-21 NSW budget announced a near $110 billion infrastructure commitment over 4 years aiming to drive economic growth.
$71 billion of this is directed towards road and rail projects helping to further drive the industrial market place both locally and regionally. Coupled with the 2 massive intermodal terminals at Enfield and Moorebank we believe the significant growth in freight volumes through Port Botany across NSW will continue to drive industrial investment levels.
As 2021 draws to a close, we will all have different reflections on the year that was, though certainly most will remember the strength of the industrial asset class. Best wishes to you & your families over Christmas & the New Year period and we certainly hope for a strong 2022, though perhaps with more predictability than we have experienced over the past 2 years.
“As 2021 draws to a close, we will all have different reflections on the year that was, though certainly most will remember the strength of the industrial asset class.”