Revival in South Sydney
The acquisition by the Charter Hall Core Plus Industrial Fund of 6.6 hectares of industrial-zoned land in Smithfield from TransGrid, for $8.9 million, underpins the strong growth expectations in the area.
CPIF also had the option to acquire an additional five hectares adjoining the site in the coming months as part of a three-stage logistics development.
The fund also confirmed the pre-commitment of national logistics operator Northline to an eight-year lease over 16,500 square metres of lettable area.
The Northline facility, indicatively worth $24 million on completion, will be built on 3.3 hectares. It is due be finished late this year, which will complete stage 1 of the $80 million Sydney development.
Jones Lang LaSalle corporate industrial solutions national director Andrew Maher, who transacted the deal, said Smithfield was a location that offered investors and owner-occupiers a genuine alternative to the outer localities of Eastern Creek and Erskine Park.
"Access to metropolitan Sydney and its population affords the site an ability to target users associated with the online retail sector and metropolitan deliveries, whilst also accommodating users with a line-haul function," Mr Maher said.
A range of other deals in the area also show that the South Sydney industrial strata market is experiencing transformation.
From Alexandria to Mascot, buyers and tenants were struggling to find the stock to meet their needs, according to the manager of CBRE's industrial and logistic team in south Sydney, Mark Silva.
"Properties for both sale and lease are hard to come by at the moment. We are finding quality, well-priced units are being snapped up quickly by tenants or owner-occupiers," Mr Silva said.
"The highest number of inquiries in the middle two quarters of the year has come from expanding tenants-owners who are seeking additional warehouse space for their increased stock numbers.
"We have also seen an increase in the amount of investors re-entering the market after a slightly subdued 2012."
CBRE senior negotiator Chris Ryan said some of the properties sold this year include a 681 square metre warehouse on Ralph Street in Alexandria for $1.95 million.
The buyer, Intermain, is a commercial fitout business now based in a 1000-square-metre unit at Bowden Street, Alexandria.
Mr Ryan said the 794-square-metre site at 1/53 Burrows Road, Alexandria, was bought by Obeco Glass Blocks for $1.25 million from Stelladorate. Obeco is Australia's largest importer and distributor of glass blocks and came out of a smaller 550-square-metre warehouse in Rosebery.
Recent leases include a modern 328-square-metre strata unit in Waterloo from Seaberth to Lace Me Up for $170/sq m net. The company imports "onesies" and higher demand has driven its business growth as it moves from a warehouse in St Peters.