Industrial assets in demand
Sales of industrial assets are rising as demand for warehouse storage and distribution centres or land for redevelopments gains momentum.
One of the latest is a development with a mixed-use zoning in Sydney's south-west slated to be auctioned in June through Stonebridge Property Group directors Philip Gartland and Lincoln Blackledge.
The 15,000-square-metre, four-level building was built in 2008 and is offered for sale by the receivers and managers Shaun Fraser and Joseph Hayes of McGrathNicol.
The asset at 32 Queen Street, Campbelltown is on a 1.45-hectare site and is zoned as a 10(a) regional comprehensive centre.
Mr Gartland said he expected very strong interest in this property as it had potential for a wide variety of uses across traditional retail, mixed-use and owner occupiers.
"The property has exposure to both the Moore Oxley bypass and Queen Street and is set to benefit from major residential development planned to accommodate the area's growing population," Mr Gartland said.
The senior director of NSW industrial at CBRE, Jason Edge, said investor confidence in Sydney's industrial market remained stable.
"Sydney's high-yield performance continues to attract the interest of investors, particularly those looking to develop quality assets in the rapidly growing western region," Mr Edge said.
But in the leasing market, there remained caution, with shorter terms and sub-lease leases becoming popular.
In the western precinct the director of Savills industrial NSW Darren Curry has tracked more than 256,000 square metres of pre-lease inquiries in 2013, the majority of them from major logistics companies and bulky goods retailers seeking between 25,000 and 45,000 square metres.
"This has been on the back of companies consolidating occupancy, improving warehouse configurations coupled with a flight to quality," Mr Curry said.
Knight Frank national industrial director Eugene Evgenikos said that despite a lack of well-leased stock available for sale, sales volumes were continuing to pick up due to a transition towards more value-added sales by many local players seeking high-yield opportunities, for example the recent sale of 11-21 Forge Street in Blacktown.
"In 2012, the transaction activity was being driven by strong demand for well-leased, core assets, particularly from offshore investors. Although this demand is still present in the market, there is a chronic shortage of such assets available for sale," he said.
"Recently we have been experiencing the bulk of transactions [by number] being driven by investors who are now keen to look up the risk curve to unlock property opportunities to take on re-leasing risk in return for a higher yield. Private buyers in the sub-$20 million range have been notably active."