The transformation of South Sydney and surrounds on the back of zoning changes in 2014, continues with commercial businesses with greater employment generation capacity moving into Alexandria/Mascot/Rosebery precinct and warehousing/logistics businesses increasingly moving toward the Port Botany suburbs of Botany, Banksmeadow and Matraville.
Recent sales bear this out.
In Alexandria we have seen:
- Listed property group Abacus pay $48,850,000 for a modern office building at 11 Bowden Street Alexandria in February 2018. With a net lettable area of 5,686 sqm and a 5.7 year WALE (by income). The price reflects approximately $8,590 psqm.
- Property developer Tipalea Partners paid $24,500,000 for a 6,175 sqm site at 23-27 Bourke Road Alexandria in February 2018, which equates to approximately $3,967 psqm site area. They propose developing the site into five new boutique hybrid retail, warehouse and office properties, subject to Council approval. Tipalea also bought 29 Bourke Road last year for $13,400,000, where they are developing a $90 million four (4) storey commercial project comprising 9,300sqm of retail and offices.
Other developments in the area include:
- Prominent industrial property giant Goodman have recently lodged a proposal with Sydney City Council for a $33m campus style ‘International HQ’ for part of their Alexandria Industrial Estate on the corner of Bourke Road and Huntley Street, directly opposite popular cafe The Grounds of Alexandria, in Dexus’ The Mill development. The proposal shows a circa 3,000 sqm head office, along with 12 office and retail tenancies all connected via an internal spine corridor.
- Engineering and infrastructure advisory company Aurecon has lodged an application to the City of Sydney for a $91 million data centre at 506-518 Gardeners Road, Alexandria. The centre will occupy a 25,780sq m site, which upon approval will consists of two floors of high-tech industrial storage in the form of colocation halls for ICT equipment, four floors of flexible and permanent office space for customers, clients and employees and multi-purpose high security meeting spaces. The proposed data centre is to be operated by global data-centre operator Equinix, who also operate centres at Bourke Road, Alexandria and Gardeners Road in Mascot and the recently purchased Metronode centre in Rosebery.(Source – Urban Developer.)
Concurrently, sales in the Port Botany precinct of Botany, Banksmeadow and Matraville look set to intensify the industrial/warehousing focus of the precinct:
- Goodman paid $25.2million for a 2.25 Ha vacant former Masters site in October 2017 in Cornish Circle, Banksmeadow with frontage also to Wight Street. Located approximately 2kms from Port Botany the sale reflects a land sales rate of ~$1,120 psqm.
- Integrated logistics property specialist Logos has recently acquired a large 4.4-hectare warehouse site currently leased to ASX listed packing company – Orora at 2-6 Moore Street Banksmeadow for $72.4 million in an off-market sale reflecting a land sales rate of ~$1,645 psqm.
- In March, Leda Holdings paid $36 million for a 1.85-hectare industrial site at 8-10 Moore Street Banksmeadow, located opposite Westfield Eastgardens, reflecting a land sales rate of ~$1,945 psqm. Leda is expected to develop this site after developing a 9,385m2 industrial site at 13-19 Baker Street Banksmeadow; Leda bought for $16 million in late 2016, reflecting a land sales rate of ~$1,705 psqm.
- In December 2017, an investor paid $20,915,000 for a 13,050m2 property with a 19.66 year lease to Veolia Enviromental Services at 3-19 Military Road Matraville, reflecting an passing initial yield of 4.92% and a rate per m2 of Gross Lettable Area of $7,488/m2.
We see no sign of this transformation slowing down, with the growth of E-commerce and the requirement for fulfilment centres close to residential areas set to re-inforce the strategic importance of the South Sydney industrial precinct.
Author: Chris Sully
Chris is a Senior Executive at Link Property Services and operates from our Alexandria office.