The investment value of the national industrial property market could reach the heady heights of $77 billion in the next 10 years, driven by e-commerce and tight supply, according to JLL directors.
JLL says it recorded $5.02 billion of industrial transactions across Australia’s industrial market in the 2017-18 financial year.
Portfolio sales made up about $1.94 billion of the $5.02 billion worth of industrial product traded over the 2017-18 financial year, alone.
Volumes were lifted by three major sale-and-leaseback transaction. The Blackstone acquisition of 10 cold storage assets from Swire Cold Storage, on a 20-year sale-and-leaseback; the Qualitas acquisition of 10 flour milling and production facilities from Pacific Equity Partners and Ascot Capital’s purchase of seven warehouses from the Federal Group, on a 12-year sale-and-leaseback.
JLL’s head of capital markets, industrial and logistics, Tony Iuliano, said given the limited number of assets placed on the market over the past financial year, premiums were paid for portfolio transactions in order to obtain scale.
''JLL is projecting that Australia’s industrial investable universe will reach $77.1 billion in value by 2028. This equates to 44.1 million square metres in total gross lettable area [GLA]. The current size of the market is about $54.1 billion in value, or 31.5 million square metres of GLA,'' Mr Iuliano said.
''If a higher volume of retail sales are generated through digital channels, the required industrial floorspace per capita could rise. According to our analysis, the required national annual industrial supply could increase by as much as 1.88 million sqm per annum over the next decade.''
One of the latest sales is by Centuria, which has listed a large-scale distribution centre in Western Sydney with pricing expectations in the mid-$20 millions.
LJ Hooker Commercial Silverwater director, Marcel Elias, and Colliers International’s national director, Gavin Bishop, and manager capital markets, Sean Thomson, have been appointed to sell the 13 Ferndell Street, South Granville, 15,302 sqm facility.
It sits on a 26,740 sqm site and is tenanted by ASX-listed BlueScope Steel.
Investor Bob Ell’s Leda Holdings has sold a second property from the Sydney Six portfolio for a strong price of $18.13 million.
An overseas owner occupier/investor secured the Wetherill Park warehouse at 488-490 Victoria Street, in a deal negotiated by CBRE’s Elijah Shakir and Jason Edge.
Leda Holdings acquired the Sydney Six portfolio in May last year, delivering the group control of four Wetherill Park assets, a Smithfield property and an Eastern Creek site.
On the leasing side of the ledger, Frasers Property Australia, with JLL's Greg Pike, has secured a 12-year lease with LJM (NSW) Pty Ltd for a speculative space in Eastern Creek Stage 5.
The 13,050 sqm facility comprises a 12,500 sqm warehouse, 550 sqm office and over 100 car spaces. LJM is relocating from two facilities in Huntingwood.
Ian Barter, general manager commercial and industrial Northern Region for Frasers Property Australia, said Eastern Creek Stage 5 has already secured three major commitments from Rhino Rack, LJM and FDM which is a reflection of the continued strong demand for space in Western Sydney.
''Frasers Property purchased the 3.5 hectare Eastern Creek Stage 5 site earlier this year from Jacfin Pty Ltd, which shares a common boundary to the company’s Eastern Creek Industrial Estate,'' Mr Barter said.
Carolyn Cummins is Commercial Property Editor for The Sydney Morning Herald.