What Sydney’s Transport Plan Means for Industrial Sites

The Savills Blog

What Sydney’s Transport Plan Means for Industrial Sites

When the NSW government released its NSW Long Term Transport Master Plan in December 2012, it was make-or-break time for Sydney’s industrial sites, which rely on being well connected to infrastructure. So which areas stand to gain or lose from the proposed changes?

Industrial prices follow infrastructure

Darren Curry, divisional director at Savills in NSW, says industrial land values and industrial rents all naturally follow infrastructure. He highlights the introduction of the Western Sydney Orbital, now known as the M7, which connected the M5, M4 and M2 in late 2005, as an example of the effect of transport upgrades.

“When the M7 was constructed, there was a huge lift in historic land values,” says Curry. “We saw land values increase from $100 per sq m in early 2002 to $350/sq m in 2007/08, which were the heady pre-global financial crisis days.” 

Logistics crucial for industrial sites

The NSW Long Term Transport Master Plan acknowledges that freight logistics are crucial to economic activity in NSW and predicts freight movement in the state will double by 2031. The plan promises to fix bottlenecks on road and rail networks, and increase the capacity of the freight network to improve sustainability and support economic growth. 

But for property owners looking to capitalise on the state government’s transport plans, one of the challenges will be timing. There is often substantial lag time between when transport projects are announced and their start or completion dates – sometimes many years or even decades away – if indeed they get off the ground at all.

Southwest winners

Darren Curry believes there are several areas of Western Sydney that stand to gain from the proposed changes, including the areas around Badgerys Creek – the site of Sydney’s second airport. Prime Minister Tony Abbott has announced a “roads first, airport second” approach to infrastructure, and the NSW government announced separate plans for a six-station rail extension. 

“When you’ve got public amenities such as train, airport and upgraded road systems, this all leads to a much freer road network, which will in turn relieve congestion issues which have burdened many Western Sydney industrial regions – in particular Revesby, Milperra to Moorebank.”. 

“The southwest growth corridor is going to be a real winner for industrial. The road systems will be enhanced and infrastructure will be improved. That includes Edmondson Park, Smeaton Grange, Oran Park and particularly Badgerys Creek.”

The game-changer: Moorebank Intermodal

Darren Curry believes the real game-changer in Sydney’s transport plans is the Moorebank Intermodal Terminal, which will help manage the expected growth in freight moving through the city. It is expected to be in full operation around 2029. The terminal’s open-access facilities will link to the Southern Sydney and Port Botany rail freight lines and include the ability to handle import-export shipping containers and interstate containerised freight, as well as warehousing facilities.

“Removing the freight off the road will provide a massive relief on current road networks out of South Sydney to the southwest corridor. That’s a real game-changer for the industrial sector. It’s a long-term play, but if they can get it right it’s going to be of substantial benefit to Sydney’s southwest region.”

Missing transport links

Sydney’s missing road link is the proposed WestConnex, running from Strathfield to St Peters, the Sydney Airport and Port Botany. Construction on the 33 km tollway begins in 2015 and will run until 2023. When completed, it will connect the M4 with the M5, including upgrades along Parramatta Road.

“By alleviating the congestion along Parramatta Road it allows for areas in and around Homebush, St Peters to the airport and the M5 to be more accessible.”

The Transport Master Plan also includes the new NSW Freight and Ports Strategy, developing Port Growth Plans, an action plan for the Port Botany precinct, establishing a NSW Cargo Movement Coordinator, identifying future demand and developing a project pipeline to support network capacity, new measurement and reporting frameworks, growing off-peak freight movement and protecting strategic freight corridors throughout NSW.

Also taking advantage of infrastructure through road upgrades and the rail out to the Norwest sector are locations such as Marsden Park. Marsden Park has already anchored some big names that include Swire, Toll, Costco, Masters Home Improvement, Bunnings Warehouse, as well as a new IKEA in a 250 hectare business park. 

West benefits over south

But while the Western Suburbs stand to gain a lot, South Sydney’s industrial sites will lose out. This traditionally industrial inner-southern area is instead undergoing rapid urban renewal, and many parts are being rezoned to residential and commercial, says Curry.

“It used to be that if you were a freight forwarder you had to be in the port and leverage off those Botany and Banksmeadow industrial locations. But if indeed when all this infrastructure comes to fruition – and when the Moorebank Intermodal starts operating – there will be a rethinking of what these bigger companies do in regards to getting a more significant footprint out west.”.

Recommended articles