Industrial leases flying off the shelves
The boom in online shopping amid the coronavirus lockdown has underpinned demand for industrial property, with no easing expected over the medium term.
The trend has fuelled expectations rents will lift when new contracts are signed or deals renegotiated.
The Sydney Olympic Park Authority (SOPA) has taken advantage of the jump in demand, inking a 99-year lease for the under-construction Homebush Logistics Centre at 201 Parramatta Road, Homebush West. The centre will include corporate offices and high clearance warehouses, with completion due in mid-2021.
Under the deal, the authority has signed a 25,637-square-metre site to local developers Trumen and Norman Property Partners. The developers will lease the SOPA-owned units over the construction phase.
The ground lease was negotiated by CBRE’s Michael O’Neill, Shaun Timbrell and Jason Edge at a rental range between $40-$50 per square metre (net) for the usable land.
Homebush Logistics Centre is directly opposite Sydney Markets and has clear access to the M4 and Parramatta Road, which makes the site ideal for online and food-related users.
Mr O’Neill said that while investors typically had a stronger appetite for freehold sites, “several groups recognised the enormous potential that the location’s connectivity offered end users”.
Raj Chaudhary, NSW associate director of CBRE industrial and logistics, said that several occupiers had experienced 100 per cent increase in online demand since mid-March.
“Some of this activity has been driven by consumer ‘panic buying’, but we expect demand for online delivery to continue in the current environment and, if the consumer experience is positive, we expect it will only drive quicker adoption rates in the medium term,” Mr Chaudhary said.
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