National logistics and transportation titan, Austrans, has secured the final speculative warehouse at Bankstown Airport, setting a new prime industrial rent benchmark in Western Sydney, according to JLL.
Peter Blade, Greg Pike, Bella Cass, and Adam Scimone negotiated the seven-year lease for Building 4B, 1 Kirby Place, which comprises 14,615 square metres (sqm) of premium warehouse and office space.
Developed by Altis Property Partners, the building spots a 6 star Green Star design and certification, a nine-tonne point load capacity, 20-metre awnings complementing its A-grade doors, a state-of-the-art Early Suppression Fast Response (ESFR) sprinkler system, and a 13.7-metre ridge height.
Notably, the asset’s 36m super awning and dedicated hardstand further enhance the site’s overall operational efficiency.
“We are thrilled to be increasing our footprint with such an important customer. The location, quality, plus design attributes are what ultimately attracted us to this building,” said Austrans managing director, Greg O’Shea.
JLL Research reports that industrial rental growth has been healthy in Q2 2023 in New South Wales, coming from 2022’s explosive growth.
Though there were record numbers of completions in 2022, the rental market has been weighed down by a scarcity of available leases.
“In the dynamic landscape of today’s industrial market, this benchmark-setting transaction is a reflection of the on-the-spot demand we’re continuing to witness. Rents remain strong for immediate vacancies in the Sydney market, with the lease being negotiated and signed within 72 hours,” said JLL head of industrial and logistics brokerage, Greg Pike.
“Industrial rents are soaring for sustainable warehousing. The demand for cutting-edge, environmentally conscious, and strategically positioned industrial spaces is on the rise. The Austrans-Bankstown Airport deal sets a new precedent, setting a new rental benchmark in Western Sydney at $280 per sqm net,” he added.
“Substantial growth of new local 3PL and transport providers in the market is a trend we continue to see, where locally owned operators are gaining market share due to their nimble nature and ability to adapt to a dynamic market.”
Rents for industrial assets have been booming. JLL Research indicated that the whole-market prime average rental rate for industrial assets rose by 4.8% for the tenth consecutive quarter to $225 per sqm per annum.
Additionally, over the past 12 months, the market average prime rental rate grew by 24.1% year-on-year, driven by the 35.6% and 35.1% respective growth of the Outer South West and Outer North West precincts.
Other reports have also observed this phenomenon. Ray White’s research shows that industrial assets were one of the few asset classes that performed well over 2023 despite poor market conditions.
Part of the reason for the healthy performance of industrial assets over the last year is a rise in the consumption of perishables like fresh food and pharmaceuticals. This has increased demand for industrial assets that facilitate the storage and distribution of these goods.
The rise of small businesses has also been another factor, with the new companies absorbing much of the available industrial space.
Moreover, limited land availability nationwide and supply delays stemming from issues in construction have exacerbated the tight supply, ensuring that vacancies continue to remain low amid high demand.
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