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ESR Australia and Lendlease have expanded their footprints into the booming industrial property market with a focus on Sydney’s western zones, where demand is rising in preparation for the new second airport.
The deals come as supply is near zero in some areas and rents are booming.
In the latest transaction, ESR Australia has paid $70 million for a 17 hectare parcel of developable land in tightly held Badgerys Creek, marking its first foothold in the Western Sydney Aerotropolis.
The 82,000-square-metre site is in the Liverpool City Council area and is zoned within Priority 1 Zone for enterprise / light industrial development. Located less than 3 kilometres from the entrance to the new Western Sydney Airport, the site fronts the main arterial of Martin Road.
ESR Australia has paid $70 million for a 17ha site in Badgerys Creek, Sydney
ESR Australia will commit a total of $270 million in the acquisition and development of the site, which expands across four warehouses.
ESR Australia chief executive Phil Pearce said ESR Australia will exercise its “robust development capability” to ensure the delivery of premium facilities in line with the anticipated opening of Western Sydney Airport in 2026.
He said in alignment with ESR’s environment, social and governance commitments, there will be a focus on reducing energy consumption, and the design will be in consultation with local communities.
“Future customers at ESR’s Martins Road site will have the ability to be operational as soon as Western Sydney Airport comes online,” Pearce said.
He added they will also have the benefit of leading-edge renewable energy infrastructure, which is an increasing concern for customers with the rise of automation and electrified fleets.
The deal was managed and negotiated by Harry Bui, head of Asia Market, Australia, of Colliers who was acting as on behalf of a Vietnamese private family office.
Bui said as this is one of the last remaining blocks of this size owned by the private family, the owner has previously been approached by several developers to acquire the site.
The record increase in industrial rents has bolstered the pricing of land in western Sydney, with a further 27.5 per cent of rental growth seen in the first six months of 2023 alone, coming off a record year of 33 per cent in 2022. The long-term average is 4.9 per cent per annum.
The Lendlease-managed Australian Prime Property Fund Industrial has exchanged contracts for a site at 15 Britton Street, Smithfield for $47.05 million.
The 3.2 ha site is located within a core logistics area in Sydney’s Central West and comprises a 12,979 square metre warehouse and office secured by a short-term lease to a prominent snack food manufacturer.
The asset is part of the fund’s strategy to provide well-located warehousing and logistics solutions to satisfy the growing demand for improved fulfilment and last mile distribution facilities.
Tim Simpson, fund manager, APPF Industrial said Smithfield is a sought-after location in Sydney and when complete this development will improve warehousing solutions for the fund’s customers.
Lendlease-managed Australian Prime Property Fund Industrial has purchased 15 Britton Street, Smithfield 
Gavin Bishop and Sean Thomson from Colliers and Chris O’Brien and Jason Edge from CBRE managed the sale process.
“On a global scale, Australia is under catering for high quality and thoughtfully designed infill logistics properties to meet the accelerating shifts in consumer habits where tenants require fast and efficient supply chains,” Simpson said.
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