New Zealand-listed building materials giant Fletcher Building has sold its long-held manufacturing hub in Penrith, in Sydney’s west, for just under $30 million to local developer Aon Ari Property.
The 12.06-hectare site at 2115 Castlereagh Road had been owned by Fletcher Building since 1959.
It sold with a lease in place to the site’s major tenant, Capral Aluminium, which occupies part of the 33,786 square metres of older-style warehouse facilities. Capral acquired Fletcher’s Australian aluminium business in 2002.
The transaction follows a number of significant deals this year and confirms Penrith’s status as an emerging industrial property hub alongside more established western Sydney precincts such as Eastern Creek and Horsley Park.
In May packaging giant Visy sold its Penrith factory in a $17.25 million sale-and-leaseback style deal to Sandran Property Group on a yield of 5.79 per cent. And in July Charter Hall acquired the Penrith glass plant of Owens-Illinois for $88 million, also in a sale-and-leaseback deal struck with Visy (which bought O-I’s Australian business).
Aon Ari Property will reposition and develop its property, which has very low site coverage and plenty of surplus land, to accommodate a host of micro and medium-sized manufacturers.
“What we’re trying to achieve is a manufacturing and employment precinct with over 300 people working on site,” said Aon Ari chief executive John Joannou.
JLL’s Roger Miller, in conjunction with CBRE’s Jason Edge and John Micallef, sold the Penrith asset via an expressions-of-interest campaign.
“This transaction reinforces the ongoing robust nature of the industrial market. Western Sydney remains a highly attractive proposition for purchasers who continue to appreciate current and planned infrastructure investment,” Mr Miller said.
Glendenning site sold
Also in western Sydney, but 25 kilometres closer to the city centre in Glendenning, one of the region’s last remaining infill industrial sites has changed hands for a similar price after being sold by paint and coatings manufacturer Valspar Corporation.
The 5.25-hectare site features a small office/laboratory building of about 2000 square metres and associated parking. It was offered for sale with vacant possession.
CBRE’s Jason Edge and John Micallef negotiated the sale but declined to identify the buyer. The site last sold for $186,000 in 1986.
“We received substantial interest from institutional and private developers during the process, which is reflective of the shortage of serviced industrial land available in western Sydney,” Mr Micallef said.
“The size of the site and its core location in Sydney’s land-constrained Glendenning industrial and logistics precinct were key drivers of buyer interest, with the property offering high exposure to the M7 motorway and significant development potential.”
Mr Edge said the strong buyer interest highlighted the scarcity of industrial land in western Sydney, which had translated to low levels of new industrial and logistics development.
In the first quarter of 2020 just 153,000 square metres of new industrial supply was added – 76 per cent below the 647,000 square metres of stock added in the first quarter of 2019.
“Industrial demand throughout Sydney remains very strong as companies continue to refine their supply chains,” Mr Edge said.
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