Sutherland Shire industrial market continues vibrancy

THE SutherlandShireindustrialmarketcontinues to be a local hub for activity, according to Ray White’s latest Between the Lines* commercial research.

“Across the SutherlandShire there are three major precincts of industrial stock; these include Caringbah/Taren Point, Kirrawee and Kurnell,” said Ray White Commercial NSW – Greater Sydney North Director Charlie Yankos OAM.

“These three key locations have been identified in the South District Plan to ensure industrial land is retained and managed, given the local employment generated as well as contribution to Sydney’s manufacturing market including other services, freight and logistics uses.

“With limited underdeveloped industrial land within the SutherlandShire, we’ll see continued revitalisation and redevelopment of existing stock, as well as a greater move to the more land-rich Kurnell precinct.

“Looking ahead, the prolonged low interest rate environment will ensure a greater volume of investors as well as owner occupier businesses continuing to invest in this location, keeping yields low and capital values elevated.”

Ray White Commercial NSW – Greater Sydney North Sales and Leasing Agent Brad Lord said sales activity had been stable over the last few years across the SutherlandShireindustrialmarket.

“The high volume of owner occupier purchases has ensured that these rates continue at a steady level,” Mr Lord said.

“Historically, we’ve seen the bulk of investment activity in the Caringbah/Taren Point location, with the size and locational advantage of this precinct driving demand for stock.

“In 2019, we saw this region account for 60.75 per cent of the $133.637M which changed hands. Kurnell historically represents the smallest portion of sales across the SutherlandShire.

“But there was an uptick in activity during 2019 due to the sale of 230 Captain Cook Drive in August 2019 to EG Funds Management, the sale for $36M included a short-term leaseback to Dicker Data, representing a 5.8 per cent yield.

“Kirrawee resulted in just $13.575 million in sales during 2019, dominated by small strata industrial unit transactions with an average sale price of just $678,750.”

Mr Yankos said while owner occupation was high across the SutherlandShireindustrialmarket, there was still a vibrant leasing market.

“Each location can achieve a wide range of rents due to the various levels of quality of assets in this area,” he said.

“Smaller, modern facilities which are well located and include parking are in high demand pushing rates to the upper levels, however older style factory premises are increasingly difficult to lease and may achieve a lower rate in the range.”

Ray White Head of Research Vanessa Rader said the SutherlandShire was home to over 450ha of industrial zoned land, the largest precinct being the Caringbah/Taren Point location, which was home to 782,583sq m of industrial stock

“Demand in this precinct is high, given the central location and access out of the SutherlandShire via Captain Cook bridge to the airport, port facilities and other major roadways,” Ms Rader said.

“The suburb also includes several showroom retail uses including Caringbah Home outlet which attracts demand by allied services.

“Currently, vacancy sits at 4.89 per cent representing less than 40,000sq m, which is impressively low given the range in age and quality of assets in this location.

“Kurnell is the most remote location of our survey area being home to 227,890sq m of industrial stock, the low vacancy of 4.24 per cent highlighting high local demand.

“Kirrawee has been the best performing industrial location considering occupation, representing just 2.98 per cent vacancy of the 338,228sq m of stock, highlighting interest in assets within close proximity of Princes Highway.”

*Ray White Between the Lines – SutherlandShireIndustrial Overview – February 2020.

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