Storage and distribution drive growth

Demand for industrial and business park assets is rising, with sales and leasing deals triggered by growth in the storage and distribution sectors and easier access through new transport infrastructure.

The listed Hills Holdings Limited is to raise cash for its business through the sale of its warehousing facilities at 10-12 Wiggs Road, Riverwood, in south-west Sydney.

The group, which has appointed Knight Frank directors Paul Mileto and Eugene Evgenikos, is to sell the property with vacant possession followed by a delayed settlement.

The company will then decide upon its new location.

Under the deal it will sell an office/warehouse complex that includes the existing building area of 8092 square metres over five separate buildings on 2.08 hectares.

The five buildings comprise a 3220 sq m warehouse, a 2330 sq m office/warehouse, a 1054 sq m office/warehouse, a 1195 sq m office and a 291 sq m warehouse. No price has been disclosed but similar properties in the same area have sold for as much as $10 million in the past year.

The national directors of industrial at Knight Frank, Mr Evgenikos and Mr Mileto, said the property was zoned light industrial, but with its high-clearance warehousing space and truck container access and manoeuvrability, it would be attractive to many industries.

With approval from council, the land over time could even be converted into residential, as has happened with similar sites.

"The property consists of four freestanding warehouse buildings and is ideally suited for an owner-occupier or an investor who is either looking to secure a large site for tenants or wanting to subdivide or redevelop," Mr Evgenikos said.

"Based only 20 kilometres south-west from the Sydney CBD, Riverwood is a highly sought after industrial area due to its close proximity to key road infrastructure, including the M5 motorway, and is ideal for stock which can be transported by road to its final destination."

Mr Mileto said the property's proximity to Port Botany and Sydney Airport would suit small consumer goods operators.

Another sale in the industrial/business park sector was the F.Hannan Properties Pty Ltd site at 126-136 Bourke Road, Alexandria, to a private investor for $21.19 million.

The property formed part of the 19-hectare Sydney Corporate Park, and has about 8857 sq m of building across four units on a site of 1.377 ha.

Link Property Services partner Artie Kalpidis, who negotiated the sale off-market, said international freight and logistics company Panalpina had leased about half of the property since its completion in 1996.

Further west was the recent leasing deal by Australand of the tenant OfficeMax at its Eastern Creek Business Park in the first major industrial pre-lease in western Sydney. The global stationery and office supplier has committed to a 10-year pre-lease for a new 19,800 sq m office and warehouse facility in stage four of the industrial estate. OfficeMax will relocate from Chullora upon completion of the new $26 million facility late this year.

Australand's general manager NSW for commercial and industrial, Ian Barter, said the group had developed more than 300,000 sq m of industrial space at Eastern Creek Business Park to date and with the OfficeMax pre-lease marking the start of stage four, the estate was set to grow by up to 125,000 sq m.