Industrial Intel Q3 2020 - Knight Frank
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IN DUSTR IA L INT EL | Q 3 2 020 knightfrank.com.au
Industrial Intel
Q 3 2 02 0
Connect With Us
N AT I O N A L
Darren Benson
Partner,
National Head of Industrial Logistics
+61 403 722 104 QUEENSLAND
Darren.Benson@au.knightfrank.com
Mark Clifford
Partner,
Joint Head of Industrial Logistics, QLD
+61 408 451 848
Mark.Clifford@au.knightfrank.com
Chris Wright
Partner,
Joint Head of Industrial Logistics, QLD
+61 419 780 378
Chris.Wright@au.knightfrank.com
SOUTH AUSTRALIA
Oliver Totani
Director,
WESTERN AUSTRALIA
Head of Agency, SA NEW SOUTH WALES
Geoff Thomson +61 412 808 743
Director, Oliver.Totani@au.knightfrank.com Mark Silva
Head of Industrial Logistics, WA Head of Industrial Logistics, NSW
+61 407 245 801 +61 416 320 550
Geoff.Thomson@au.knightfrank.com Mark.Silva@au.knightfrank.com
K E Y LO C AT I O N S
K E Y LO C AT I O N S
VICTORIA
Gab Pascuzzi
Partner,
Head of Industrial Logistics, VIC
+61 411 703 391
Gab.Pascuzzi@au.knightfrank.com
In Australia, Knight Frank has
Knight Frank Industrial focuses on partnering with our
22 offices, servicing both capital
clients to deliver innovative and integrated property
cities and regional centres, with solutions, to improve the way they make real estate
3
2
approximately 1,000 employees. decisions.
“We are predicting a much more active
quarter for leasing activity as borders re-
Brisbane Snapshot open. The run in to Christmas and early 2021
could be very active for leasing agents.”
By Mark Clifford & Chris Wright
There are extremely high interest levels being shown by We are predicting a much more active quarter for leasing Market Highlights
investors in industrial property. Any reasonable investment that activity along with borders re-opening. The run in to Christmas
is on the market will attract multiple offers. The vast majority and early 2021 could be very active for leasing agents. Whilst decision making processes have blown out due to COVID-19
of current activity is happening off market and we see this impacts, general tenant enquiry levels have started to increase towards
continuing into the future. the back end of the quarter.
Lease deals picking up with several major transactions taking place
Very limited sales activity in the market, however high levels of interest
from investors
Key Appointments Key Transactions
Sale Lease Lease Leased Leased Leased
63 Tile Street, Wacol 31 Meakin Road, Meadowbrooks 278 Orchard Road, Richlands 4, 200 Holt Street, Pinkenba 13 Business Street, Yatala T3, 16 Quarry Road, Stapylton
Size 7,320 sqm Size 8,951 sqm Size 12,420 sqm
Size 16,187* sqm Size 861 sqm Size 7,280 sqm
N AT I O N A L S N A P S H OT
N AT I O N A L S N A P S H OT
Rental $125 p/sqm Rental Undisclosed Rental Undisclosed
Sam Harper, Lachlan Hateley, Chris Wright, Sam Harper, Matthew Williams,
Agent Mark Clifford Agent Agent Agent Agent Agent
Matthew Williams Mark Clifford Ben Hatch Matthew Williams Mark Clifford
Lease Lease Lease Leased Sold
37 Freight Street, Lytton 92 Sandstone Place, Parkinson 70 Darlington Drive, Yatala T4, 16 Quarry Road, Stapylton 80 Computer Road, Yatala
Size 5,600 sqm Size 5,707 sqm
Size 9,036 sqm Size 13,738 sqm Size 11,262 sqm
Rental Undisclosed Price $2,000,000
5
Chris Wright, David Knox, Sam Harper, Matthew Williams, Sam Harper,
Agent Agent Agent Agent Agent
4
Ben Hatch Lachlan Hateley Matthew Williams Mark Clifford Matthew Williams
< Return to MapBrisbane Market Overview Our Team
South | South West Yatala 01 02 03 SOUTH | SOUTH WEST |
TRADECOAST | NORTH
The last quarter has seen an increase in levels Strong levels of activity have been seen in the
of interest from tenants in the larger spec precinct, with several of the larger deals taking 01 Mark Clifford
developments which are either completed or near place including AMES- Quarry Rd Stapylton (12,420 Partner,
Joint Head of Industrial Logistics,
completion. Several larger tenant briefs look set to sqm) and the purchase of 80 Computer Rd, Yatala.
QLD
find a home with decisions getting close on over Several major infrastructure projects will have a +61 408 451 848
35,000 sqm of requirements. This will make a massive impact on the area, with the Coomera Mark.Clifford@au.knightfrank.com
sizeable dint in the vacancy levels in these precincts Connector set to be the biggest driver of activity 02 Chris Wright
and further encourage other spec developers to there over the next decade. The key industrial Partner,
04 05 06 Joint Head of Industrial Logistics,
get started on their respective DA approved sites. estates in the precinct will benefit from the new
QLD
Investors are highly active in the precinct with road infrastructure, and it will further boost the areas +61 419 780 378
demand far exceeding current supply of opportunity. reputation as a strategic location for larger DC’s. Chris Wright@au.knightfrank.com
03 Lachlan Hateley
TradeCoast Associate Director,
Industrial Logistics, QLD
The TradeCoast market has experienced an uplift +61 405 257 209
in both tenant and owner occupier enquiry over Lachlan.Hateley@au.knightfrank.com
the last quarter. Notable transactions across 04 Ben Hatch
the precinct include Australia Post leasing 07 Associate Director,
Industrial Logistics, QLD
approximately 7,500 sqm of Charter Hall’s +61 421 169 898
speculatively built space at 4, 200 Holt Street, Ben.Hatch@au.knightfrank.com
Pinkenba and Amazon’s commitment to Goodman’s 05 David Knox
16,000 sqm facility at Export Street, Lytton. Land Associate Director,
sale enquiries have spiked in recent months Industrial Logistics, QLD
+61 408 548 281
however this market trend is met with a dearth of
David.Knox@au.knightfrank.com
well positioned industrial land available for sale,
YATALA
particularly at the larger end of the market (>10,000
06 Sam Harper
sqm). Associate Director,
MARKET OVERVIEW
Industrial Logistics, QLD
+61 423 380 514
OUR TEAM
Sam.Harper@au.knightfrank.com
07 Matthew Williams
Associate Director,
Industrial Logistics, QLD
+61 401 045 369
Matthew.Williams@au.knightfrank.com
QLD
QLD“Industrial continues to be the more resilient sector
throughout the pandemic. We are now envisaging the
Sydney Snapshot first quarter of 2021 to be very active with more recent
enquiry entering into the market.”
By Mark Silva
We have seen a complete acceleration of retail and logistic Investments Market Highlights
occupiers seeking larger warehouse space as the COVID-19
environment has led to a strengthening e-commerce and The NSW Government has decided on utilising infrastructure Shift in occupier demand specifically from e-commerce and logistics operators
logistics market place. Suburbs such as Eastern Creek and spending as the means of avoiding an ongoing recession.
Erskine Park are in demand, therefore many more traditional Investment in a world-class transport system with projects Increase in vacancy in more expensive locations
industrial occupiers are being priced out and now searching for such as the Sydney Metro West, WestConnex, and significant
financially viable alternative location. road and rail upgrades to support the new Western Sydney Since the ease of restrictions over the past three months has seen an increase in
Airport will provide the backbone for industrial occupiers’ market activity
success. Global capital markets are aware of this and are
scrambling to acquire assets that will benefit from this Strong appetite in for industrial stock across the market
unprecedented level of State Government spending.
Key Appointments Key Transactions
Lease Lease Sale & Lease Sold Leased Leased
133-139 Newton Road, 1/153 Beauchamp Road, 30 - 32 Bowden Street, Tenancy 5, 19 Holbeche Road,
Western Sydney Airport 12 Fredrick Street, St Leonards
Wetherill Park Matraville Alexandria Arndell Park
N AT I O N A L S N A P S H OT
N AT I O N A L S N A P S H OT
Size 3,900 - 9,000 sqm Size 13 ha Size 50,000 sqm* Size 1,061 sqm Size 617 sqm Size 2,571 sqm
Matthew Pizzonia, Angus Klem, James
Price $4,710,000 Price $194/sqm Price $145/sqm
Agent Agent Agent Angus Klem
Anthony Bosnar Reeves, Matthew Pizzonia Matthew Pizzonia,
Agent Mark Silva Agent Mark Silva Agent James Reeves
Lease Lease
Leased Leased
14-16 Abel Street, Jamisontown 22 Crescent Street, Holroyd 214-222 Toongabbie Road,
U1, 2 Ralph Street, Alexandria
Girraween
Size 2,200 sqm Size 2,000 sqm
Size 2,885 sqm Size 2,071 sqm
9
Matthew Pizzonia,
Agent James Reeves Agent Price $145/sqm Price $241/sqm
8
Anthony Bosnar
Agent James Reeves Agent Mark Silva
< Return to MapSydney Market Overview Our Team
Industrial Logistics Industrial Investments 01 02 03
OUTER WEST | CENTRAL WEST |
NORTH WEST | INNER WEST
The industrial sector continues to be the The investment market arguably remains the most
01 Mark Silva
strongest performing asset class in the COVID-19 sought-after asset class nationally, driven by a Director,
environment, with e-commerce and logistics flight away from retail and a large slice of industrial Head of Industrial Logistics, NSW
+61 416 320 550
occupiers driving demand. With a rapid shift to tenants who have thrived during the pandemic. Mark.Silva@au.knightfrank.com
online during this period, we are seeing 3PL and 02 Angus Klem
logistics providers scramble to meet demand The low-interest-rate environment constrained land Partner,
market, and few trading opportunities, are other key Head of Industrial Investments,
with an increase in uptake of industrial space. It NSW
continues to be the more resilient sector throughout drivers of this sector. +61 439 032 001
the pandemic. We are now envisaging the first 04 05 Angus.Klem@au.knightfrank.com
Building activity has reduced as financiers tighten 03 James Reeves
quarter of 2021 to be very active with more recent their lending requirements to ensure that only the Director,
Industrial Logistics, NSW
enquiry entering into the market. proven developers are provided with the necessary +61 404 039 884
We are also seeing occupiers taking advantage capital to produce new products. This is in contrast James.Reeves@au.knightfrank.com
to the surprisingly high take-up numbers, especially 04 Matthew Pizzonia
of the current climate and shifting from more Senior Executive,
expensive areas to a more cost-effective location within Sydney and Melbourne, when compared to Industrial Logistics, NSW
historical averages. +61 401 503 093
and negotiating betters deals within areas holding Matthew.Pizzonia@au.knightfrank.com
more vacancy. The need to review business Corporate Australia and global enterprises continue 05 Anthony Bosnar
Executive,
expenses and costs is more apparent than in any to review assets performance and the buoyant Industrial Logistics, NSW
other time. Occupiers are also reviewing their lease investment markets, leading to an increasing +61 401 252 006
expiry profiles a lot earlier than previously years Anthony.Bosnar@au.knightfrank.com
number of sale and leaseback transactions.
to better prepare for what’s ahead, in most cases
2 – 3 years out. With the uncertainty landlords are Data centres are also on the move, with Knight
entertaining shorter term leases than usual to avoid Frank establishing global and local expertise in this
extensive vacancies. burgeoning field.
With rents climbing to unsustainable levels in the
South Sydney precinct pre-COVID-19, we are seeing
a new surge of enquiry coming out of the South into
MARKET OVERVIEW
the West as South Sydney continues to battle circa
160,000 sqm of upcoming vacancy, unseen for
OUR TEAM
many years.
The tightness in supply and an increase demand for
industrial stock across NSW from private investors
and institutional groups continues to dominate the
market as well as the buzz surrounding the new
Western Sydney Airport with continued interest in
potential opportunities within the precinct.
NSW
NSWMelbourne Snapshot “COVID-19 has accelerated the shift to online retail,
and this is having a flow-on effect on demand for
industrial property in Melbourne.”
By Gab Pascuzzi
In spite of the COVID-19 pandemic and stage 4 lockdown, Prime yields will hold with strong appetite from buyers seeking
Market Highlights
transactions in the sub 10,000 sqm space remain strong with long WALE assets and, as expected, continued exponential
the rise of e-commerce and construction/food groups looking growth of e-commerce and an economic climate of low
to continue to grow. interest has made industrial a safe asset class. Strong leasing activity in the sub 10,000 sqm space
Melbourne‘s record infrastructure spend is paving the way for
new development and demand in our Western and Northern Demand continues for long WALE assets in good locations
markets. Despite a number of developments being put on hold,
Melbourne’s industrial market still looks assured of new supply
Developers/institutions looking to acquire land for future pipeline
over the medium term.
Key Appointments Key Transactions
Lease Lease Lease Leased Leased Leased
140 Northcorp Blvd, 41-51 Monash Drive, Warehouse 6, 33 Fitzgerald Warehouse 6, 4 Judge Street,
89 Miller Street, Epping 61 Sunline Drive, Truganina
Broadmeadows Dandenong South Road, Laverton North Sunshine
Size 8,271 sqm Size 6,618 sqm Size 6,283 sqm
Size 22,707 sqm Size 15,830 sqm Size 2,698 sqm
N AT I O N A L S N A P S H OT
N AT I O N A L S N A P S H OT
Rental $88/sqm Rental $75/sqm Rental $75/sqm
Marco Sandrin, Gab Pascuzzi, Brent Glassford,
Agent Agent Agent Joel Davy, Joel Davy, Steve Jones,
Brent Glassford Adrian Garvey Marco Sandrin Agent Agent Agent
Steve Jones Steve Jones Joel Davy,
Lease Sale Sale Leased Sold Sold
41-47 William Angliss Drive, 1084 Centre Road, Warehouse B, Reid Way, 520-528 Somerville Road,
44 Translink Drive, Keilor Park 6-10 Lace Street, Doveton
Laverton North Oakleigh South Melbourne Airport Sunshine West
Size 4,532 sqm Size 10,600 sqm (site) Size 7,143 sqm
Size 3,076 sqm Size 4,067-8,626 sqm (approx.) Size 3,997 sqm
Rental Undisclosed Price $3,600,000 Price $3,050,000
13
Marco Sandrin, Joel Davy, Adrian Garvey,
12
Agent Agent Agent Marco Sandrin, Michael Satterley, George Linn,
Brent Glassford Steve Jones Stuart Gill Agent Agent Agent
Brent Glassford Andrew Gallucci Adrian Garvey
< Return to MapMelbourne Market Overview Our Team
City Fringe most of the sublease space has competition for pre-commitments is 01 02 03
INVESTMENTS
now been leased. This has allowed seeing an increase in leasing incentives 01 Gab Pascuzzi
The City Fringe industrial market institutional owners to start planning being offered from developers. Partner,
continues to see many larger occupiers around construction on speculative Head of Industrial Logistics, VIC
moving out of the inner suburbs developments. There have been releases of vacant +61 411 703 391
and taking up space further out in land to the marketplace which is being Gab.Pascuzzi@au.knightfrank.com
Melbourne’s West or North. This is a Charterhall, GPT, Dexus, LOGOS and well received. Lots ranging in size 02 Scott Braithwaite
direct result of high outgoing expenses Aliro, all have plans to develop new from 3,000 sqm to 2 ha are selling for Associate Director,
speculative warehouses starting Q1 in $500/sqm. New development from Industrial Investments, VIC
and high rental rates ($/sqm) throughout. +61 418 371 612
Of recent, we have seen one of the 2021. this release will ease pressure on the
SBraithwaite@au.knightfrank.com
largest distribution centres in Port middle markets in 2022, although rents
Melbourne come to the market with Toll We have experienced renewed interest and sales prices are forecast to remain WEST
and enquiry levels from tenants over the at record pricing as demand will still 04 05 06
providing the landlord with notice they 03 Joel Davy
will be moving on. last two months. Market sentiment has outweigh supply. Partner, Industrial Logistics, VIC
increased with the dropping numbers +61 411 109 876
The opportunity to significantly reduce of COVID-19 cases to a level now where ESR is preparing to launch a new Joel.Davy@au.knightfrank.com
property expenses and secure long individuals and companies are once development in Clayton providing new 04 Steve Jones
leases is becoming a great incentive again planning for future business high clearance, modern warehousing to Associate Director,
for occupiers to relocate to the outer growth. the precinct for the first time in 5 years. Industrial Logistics, VIC
suburbs. Stage 1 of the development is expected +61 412 836 105
Most of these businesses are to reach practical completion in Q4 Steve.Jones@au.knightfrank.com
Enquiry levels to purchase and lease city associated with e-retail, e-commerce, 2021. 05 Michael Satterley
fringe facilities from 200 to 600 sqm warehousing & logistics and government Executive, Industrial, VIC
remain very healthy, however the lack infrastructure projects. The announcement of the inland 07 08 09 +61 430 432 328
of stock in that size range is making it container port at Lyndhurst was made Michael.Satterley@au.knightfrank.com
difficult and forcing buyers and tenants North in conjunction by the state and federal 06 Andrew Gallucci
to explore different locations. On the government with developer Salta, Executive, Industrial Logistics, VIC
The Northern industrial market is providing significant investment in the +61 400 754 082
larger end, we are witnessing strong continuing to experience strong enquiry
activity from pharmaceutical, automotive, region. The project is forecast to create Andrew.Gallucci@au.knightfrank.com
from occupiers in the transport and 1,000 jobs during the construction
meat and cold store groups who logistics sectors despite the current NORTH
currently operate out of the City Fringe phase and ultimately remove 100,000
COVID-19 restrictions being in place trucks from local streets and the M1 07 Marco Sandrin
markets wanting to increase or double for an extended period of time. This is Director, Industrial Logistics, VIC
their footprint. These groups have their Freeway when fully operational. Freight +61 434 562 827
mainly due to the increased activity in costs to the region are expected to
eye on purchasing due to the large online and e-commerce over the past Marco.Sandrin@au.knightfrank.com
sums that are required to relocate and reduce by 25% which will further 10 11 12
few months. enhance the appeal of the precinct to 08 Brent Glassford
set up in another location. Unfortunately, Director, Industrial Logistics, VIC
for some of the groups listed property We have seen two major pre-lease larger occupiers. +61 430 484 322
owners are very reluctant to sell or commitments with Ford Australia pre- Brent.Glassford@au.knightfrank.com
engage in conversation due to it being East
committing to 51,595 sqm (approx.) at CITY FRINGE
very difficult to replace similar quality Merrifield Business Park and Reece The East’s prime vacancy remains
assets after selling. 09 Nathan Edgar
Australia committing to a 11,670 sqm constricted by a lack new supply. Executive, Industrial Logistics, VIC
(approx.) facility at Melbourne Airport Existing assets are keenly sought by
West Business Park.
+61 411 391 453
occupiers along the EastLink tollway with Nathan.Edgar@au.knightfrank.com
The Western industrial market continues Caribbean Park experiencing high levels
MARKET OVERVIEW
We have also seen significant of demand. Existing assets in this estate MELBOURNE SOUTH EAST/EAST
to see strong appetite for land. The lack investment into the northern are being leased prior to becoming 13
of zoned industrial land hasn’t seen industrial market by Logos, who have
10 Adrian Garvey
vacant as was evidenced by the sub
OUR TEAM
prices move much with owner occupiers Director, Industrial Logistics, VIC
purchased two sites in Epping (9.7 lease of 8 Lakeview Drive with four +61 419 549 951
and developers are still looking for ha) and Broadmeadows (25 ha). This parties entering a competitive tender to Adrian.Garvey@au.knightfrank.com
opportunities. One hectare land parcels demonstrates security in the northern
are selling for between $350 to $400/ secure the upcoming vacancy. 11 Stuart Gill
market due to a shortage of land Director, Industrial Logistics, VIC
sqm with smaller blocks edging up available that is currently zoned and
towards $500/sqm. Industrial land supply remains limited +61 417 322 080
ready for construction. with brownfield sites more readily Stuart.Gill@au.knightfrank.com
There was a large increase in sublease available. Tupperware recently
South East transacted the sale of their 6 ha site to a
12 George Linn
warehouse space in the west in Q1 Associate Director,
and Q2, and due to that we saw a large With limited supply of A-grade industrial private developer who look to reposition Industrial Logistics, VIC
the existing warehouses in addition to +61 401 949 324
number of institutional owners put assets above 5,000 sqm and limited George.Linn@au.knightfrank.com
their spec building plans on hold due new speculative development forecast further development of the site once
to the increase in vacancy. We were to commence in the second half of Tupperware vacate the region. 13 Steven Salopek
Associate Director,
anticipating close to 200,000 sqm of 2020, pre commitment activity remains
VIC
As the demand for online shopping Industrial Logistics, VIC
VIC
spec space to come online by Q4 2020 buoyant. A number of developers in the +61 400 341 226
but less than half of that figure will come increases nationally service providers
marketplace have recently secured new are actively seeking opportunities in this Steven.Salopek@au.knightfrank.com
to market before year’s end. tenants prior to construction of proposed region, most notably Australia Post who
speculative facilities placing further are looking to establish a 20,000 sqm
The positive of Q3 has been that the downward pressure on the vacancy
majority of the existing specs and parcel fulfillment facility in 2021.
supply. Rents remain stable whilst the“Recent sale evidence, suggests the Adelaide
industrial market has weathered the COVID-19
Adelaide Snapshot storm. With defence and mining set to drive demand
over the next cycle, Adelaide industrial is in a good
space.” By Oliver Totani
Investment demand Industrial leasing and vacant land Supply Market Highlights
Nationally, industrial property has been the preferred asset Leasing activity has remained limited as a result of the Industrial supply has been strong over the past 12 months
Year to date, 2020 total sales volume for industrial
class for many investors as it has shown resilience during uncertainty of COVID-19, with some businesses delaying with the majority of the developments being logistics or properties above $5 million were 35% higher compared
the COVID-19 pandemic. There has been increased appetite relocation decisions and the continuing trend of owner temperature-controlled distribution centres. However, unlike to same time last year.
from institutional investors for fully leased industrial property, occupation in SA, where in lieu of leasing their property some markets in the eastern states, all of the supply noted is
particularly long WALE assets with strong lease covenants requirements, occupants are favouring to purchase their either pre-committed or owner-occupiers Outer North precincts continues to see increasing
reflected in the strong metrics shown in recent transactions. facilities. Evidence has shown that over the past 12 months, demand from owner occupiers.
there has been an increase of owner-occupiers purchasing
properties in the Northern precinct, particularly vacant land in Prime industrial assets with strong lease covenants
the Outer North areas such as Direk and Edinburgh. Buyers show resilience during COVID-19.
to date have been predominately owner-occupiers with plans
Increased appetite from institutional investors for
to purpose build facilities. Furthermore, the North to South
industrial assets such as cold storage and distribution
Corridor infrastructure development and increasing density in
facilities.
the Inner North precinct has positively impacted land values in
the Inner and Outer North precincts.
Key Appointments Key Transactions
Lease Lease Sale or Lease Leased Leased Leased
47 King William Street, 260 Regency Road, 2 Lafitte Road,
136 Daws Road, Melrose Park 17 Francis Road, Wingfield 14-22 Dixon Street, Royal Park
Kent Town Regency Park Wingfield
Size 983 sqm Size 2,050 sqm Size 1,425 sqm
Size 9,332 sqm Size 2,270 sqm Size 2,200 sqm
N AT I O N A L S N A P S H OT
N AT I O N A L S N A P S H OT
Price $180,000 Price $95/sqm Price $114,480
Marco Onorato, Jack Dyson, Oliver Totani, Jack Dyson, Marco Marco Onorato,
Agent Agent Agent Agent Agent Agent Marco Onorato
Rory Dyus Oliver Totani Marco Onorato Onorato, Oliver Totani Rory Dyus
Sale Sale Sale
Sold
10-30 Brinkley Road, 340-342 Hanson Road,
397-401 Churchill Road, Kilburn 620 Mersey Road, Osborne
Murray Bridge Wingfield
Size 4,630 sqm Size 5,500 sqm Size 8,006 sqm Size 2,501 sqm
Price $2,910,000
17
16
Jack Dyson, Marco Jack Dyson, Oliver Totani,
Agent Agent Agent Marco Onorato,
Onorato, Oliver Totani Oliver Totani Guy Bennett Agent
Oliver Totani
< Return to MapAdelaide Market Overview Our Team
Inner West Le Fevre Peninsula
Sales and leasing remain limited as the high The defence infrastructure development at Osborne 01 02 03 ADELAIDE.
underlying land value is driving a change from South shipyard has recently been completed. 01 Oliver Totani
industrial to mixed use, which is evident through The facilities will house the $35 billion frigates Director,
Head of Agency SA
Thebarton. project which will kick off with prototypes before +61 412 808 743
the first production in 2022. Meanwhile, phase 1 of Oliver.Totani@au.knightfrank.com
Inner North – Majority of the supply the Osborne North shipyard is underway and will 02 Marco Onorato
Sales Executive,
from Inner North support the $50 billion submarine project which is
Investment Sales, SA
scheduled to commence in 2023. The outlook for +61 481 157 645
New supply has been driven by expansion and Adelaide defence sector is positive as the federal Marco.Onorato@au.knightfrank.com
relocation to better quality accommodation. Recent government announced a commitment to invest 03 Jack Dyson
Senior Executive,
complete developments include the 94,000 $270 billion nationally over the next decade in new Investment Sales, SA
sqm expansion of Woolworths Adelaide Regional and upgraded defence capabilities with SA likely to +61 448 685 593
Distribution Centre at Gepps Cross, O-I Glass get a slice of it. Jack.Dyson@au.knightfrank.com
distribution centre (33,980 sqm) at Kilkenny, Drakes
supermarkets distribution centre (48,400 sqm) at Inner South
Edinburgh North, Pacific Marine Batteries (12,000
sqm) at Osborne, Sigma Health Care (10,390 sqm) There have been limited sales & leasing activities.
at Pooraka and Huhtamaki (8,280 sqm) at Pooraka. However, there is a demand for industrial property
Other notable underway projects are Metcash under $3 million.
(68,000 sqm) at Gepps Cross, SA Health (11,000
sqm) at Gepps Cross and Cochrane’s (7,500 sqm)
at Gillman.
Outer North
The North to South Corridor infrastructure
development and increasing density in the Inner
North precinct has positively impacted land values
in the Inner & Outer North precincts. Over the past
MARKET OVERVIEW
six months, average land values for properties
below 5,000 sqm have increased approximately
OUR TEAM
8.6% in the Inner north and approximately 6.2%
in the Outer North. As at July 2020, average land
values below 5,000 sqm in the Inner North are circa
$250/ sqm - $260/ sqm and for the Outer North
circa $60/ sqm - $120/ sqm. Land values for all
other precincts (Inner West, Inner South and Outer
South) remained relatively constant.
Over the past 6 months, there has been an uplift in
sales activity for vacant land in northern areas with
majority of the transactions located at Outer North
precincts such as Edinburgh and Direk. Buyers to
SA
SA
date have been predominately owner-occupiers
with plans to purpose build facilities.Perth Snapshot “The strength of the industrial sector highlighted by
upward pressure on rentals and land values.”
By Geoff Thomson
Western Australia’s position on COVID-19 and its huge mining Developers are still looking to secure land for future
Market Highlights
sector has provided a significant boost to the industrial development. While the larger developers continue to look
property market across the board. for larger “bargains” to land bank, we are no seeing smaller
Rentals in prime locations continue to firm
developers looking to secure sites for developments of 1,000 –
Buildings that have remained vacant for some time are 2,000 sqm. This is particularly noticeable in some infill sites in
now being taken up at rental levels close to asking. This is Workshops still in demand
prime locations.
particularly prevalent in the more industrial sectors in the
east and south. Workshop rates are back to $95 - $100 sqm It is worth noting that the WA government has posted a $1.7 Yields for properties with long WALEs continue to fall
depending on crane capacity. billion surplus for the 2019/20 financial year leading to an
increase in spending for larger infrastructure projects in the State government in surplus
The more local markets with smaller tenancies are still Perth area.
struggling with smaller businesses still working the effects of
COVID-19.
Key Appointments Key Transactions
Lease Lease Lease Leased Leased Leased
25 Ilda Road, 4/310 Spearwood Ave, 2/51 Howson Way, 2 Aitken Way, 50 Hope Valley Road, 54 Achievement Way,
Canning Vale Bibra Lake Bibra Lake Kewdale Naval Base Wangara
N AT I O N A L S N A P S H OT
N AT I O N A L S N A P S H OT
Size 2.2 ha Size 10,396 sqm Size 1,140 sqm Size 1,800 sqm Size 7,632 sqm Size 980 sqm
Rental $93/sqm Rental $55/sqm Rental $92/sqm
Agent Geoff Thomson Agent Scott Bailey Agent Scott Bailey Agent Geoff Thomson Agent Scott Bailey Agent Sam Hammond
Sale Sale Sale Leased Sold Sold
2 Hines Road, 86 Discovery Drive, 10 Ferguson Street, 22 Supreme Loop, 15 Opportunity Street, 28 Mordaunt Circuit,
O’Connor Bibra Lake Kewdale Gnangara Wangara Canning Vale
Size 1,700 sqm Size 1,499 sqm Size 3,300 sqm Size 2,496 Size 1,290 sqm Size 660 sqm
20
21
Rental $55/sqm Price $1,580,000 Price $1,363/sqm
Agent Scott Bailey Agent Scott Bailey Agent Geoff Thomson Agent Sam Hammond Agent Scott Bailey Agent Geoff Thomson
< Return to MapPerth Market Overview Our Team
East North 01 02 03
EASTERN CORRIDOR
01 Geoff Thomson
In the past few months we have seen an increase The northern areas of Malaga and Wangara are in Director,
Head of Industrial Logistics, WA
in activity in the eastern corridor, particularly from demand from both tenants and buyers. This has +61 407 245 801
medium to large warehousing businesses. There seen a tightening of rental and land rates. Malaga, Geoff.Thomson@au.knightfrank.com
has been a take -up of a number of properties in the for example, is now achieving rates of $380 – $400 SOUTH
Kewdale and Welshpool areas with small reductions sqm for sites of 7,000 – 10,000 sqm sites. The 02 Scott Bailey
in asking rents and minimal incentives. Demand for lack of quality sites in both these areas is driving Director,
Industrial Logistics, WA
workshops with gantry cranes and yard space is still the prices up to a level which is at odds with other +61 421 010 001
strong. suburbs. Scott.Bailey@au.knightfrank.com
NORTH
Demand for sites is still strong with developers and Given the demand, we are seeing developers
03 Sam Hammond
owner occupiers looking for opportunities. The price looking to secure large in fill sites for both Associate Director,
of industrial land has come off some 10-15% due subdivisions and or pre-leases. Further to the north Industrial Logistics, WA
+61 413 664 247
to COVID-19. Land that was previously achieving Development WA’s estate of Neerabup is finally Sam.Hammond@au.knightfrank.com
$400+ per sqm is now being sold at rates in the seeing some solid interest. Knight Frank is working
high $300 per sqm. with two buyers for large parcels of industrial land.
The buyers are looking to secure tenants looking for
The Hazelmere/Forrestfield precinct is finally seeing pre-leases.
large areas being re-zoned to industrial. Current
landowners in this precinct are Logos and the
Hodgson Group.
South
The southern corridor is quickly becoming a location
of choice for a number of industrial organisations.
The government’s announcement of the new port
and associated infrastructure that will service WA
for the next 50 years is significant. Development
MARKET OVERVIEW
WA are also bringing to the market some 70 ha of
industrial land in the next 5 years.
OUR TEAM
The demand for space is dominated by heavy
industrial users, with Knight Frank securing tenants
for approximately 60,000 sqm of space. Much of
this space is secondary.
Land rates are firm at $150 - $200 and rental rates
vary between $65 - $80 m2 depending on the
quality of the space.
WA
WAKnight Frank Australia Pty Ltd Level 22, Angel Place 123 Pitt Street Sydney NSW 2000 Australia knightfrank.com.au
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