GPT Group has boosted its logistics business with the practical completion on a 18,000 square metre logistics facility at 18-24 Abbott Road, Seven Hills.
The new facility comprises of two 9000 square metre warehouse and office spaces, with a tenant being secured for one of the spaces on a seven-year term.
GPT’s Seven Hills facility in Sydney has warehouse and office space. Photo: Mitch Cameron Photography
It comes as industrial and logistics landlords await the arrival of the giant internet group, Amazon, which is in the market for large sites for its fulfillment centres.
Goodman Group’s Oakdale industrial estate at Sydney’s Eastern Creek, is said to be its first, but Amazon has been talking to other landlords as it seeks out sites across the country.
GPT’s head of office and logistics Matthew Faddy said the Seven Hills development was part of the Group’s strategic focus to grow its logistics portfolio in prime locations across Western Sydney, primarily through development.
“The speculative development at Seven Hills has added a quality logistics asset to the GPT portfolio and has allowed the Group to find a long-term income from a former manufacturing site that had reached the end of its economic life,” Mr Faddy said
“Demand for logistics space remains at record levels across Sydney, with the majority of the take-up in Western Sydney where GPT remains on track to deliver $125 million of logistics assets in 2017.”
GPT has also confirmed a heads of agreement (HoA) has been signed for GPT’s recently upgraded 21,000 square metre facility on Huntingwood Drive, Huntingwood, which the group purchased last year.
GPT has also commenced construction works at Eastern Creek Drive, Eastern Creek, where it has received development approval for a 25,600 square metre logistics facility. Construction of the asset is expected to be completed in October. The Group has received a strong level of enquiry on the planned Eastern Creek facility from potential tenants.
The new deals come as industrial land in Sydney’s North sub-market experienced a record growth rate in the first quarter of 2017, according to the latest research by Colliers International.
Industrial land value in Sydney’s North has increased by 34 per cent over the quarter, now averaging at $1675 per square metre per annum, being a year-on-year growth of 36 per cent.
Sass J-Baleh, research manager at Colliers International, says that the record growth rates, which have not been seen since before the GFC, are a result of the lack of industrial supply available in Sydney’s North sub-market.
“The north-sub market has only a 2.9 per cent share of land supply left in the Sydney Metropolitan area, with no potential future employment land in the area identified by state planning,” Ms Baleh said.
“This is in stark contrast to the west market where most of the future employment land release areas are expected to be added.”
“Additionally, developers and owner-occupiers are land banking for the purpose of a future rezoning to allow for residential dwellings. This means there is less property on the market, further adding to a supply constrained market.”
Mirvac, in its third-quarter update, says the industrial sector has been experiencing solid tenant demand from third-party logistics and ecommerce firms, supporting above-average take-up for well-located industrial facilities.
“In Sydney, where the majority of the Group’s industrial facilities are located, there are limited levels of vacant prime stock, particularly within inner ring markets due to substantial urban regeneration,” the Mirvac report says.