Wetsern Sydney. Demand remains steady

Tenant demand across Sydney’s west has remained steady over the past six months with the majority of deals done being renewals, according to Collier Sydney Industrial Report for the second term 2011.

Tenants have looked to exercise their lease extension options due to the ongoing uncertainty in the global economy, which continues to keep business confidence low and therefore postponing business expansion plans.

The sub-10,000 square metre market has continued to drive the land market in the region with an increase in the number of owner occupiers purchasing lots in the last six months.

This demand from owner-occupiers has occurred due to the lack of existing suitable properties available for lease or purchase, forcing them into the market to develop a purpose built asset.

This increase in demand also indicates that buyers now see land values have reached a point at which developing a property stacks up financially.

Land values have reminded steady over the past six months ranging from $150 per square metre in the Outer West to $600 per square metre in the Inner West.

Hoxton Park. Large industrial project

A positive story for the south-west industrial market over the past 12 months has been the success of Mirvac’s Hoxton Distribution Park at the former Hoxton Park Airport. The Hoxton Distribution Park is one of Australia’s largest industrial developments and consists of two state-of-the-art logistics facilities which have been 100 per cent pre-leased to Woolworths Limited, according to Collier Sydney Industrial Report for the second term 2011.

South West. Industrial market

The Sydney South West industrial market has seen a number of large high quality assets transact over the past six months, according to Collier Sydney Industrial Report for the second term 2011, bucking the trend of the other Sydney markets and providing evidence that prime grade yields in the region have begun to tighten by as much as 25 basis points.