Savills News

Industrial is the new black

A major land sale has transacted in Forrestfield for $9 million, as demand for industrial property assets in Perth’s core suburbs regains momentum.

A major land sale has transacted in Forrestfield for $9 million, as demand for industrial property assets in Perth’s core suburbs regains momentum.

Located in one of the city’s prime industrial and logistics pockets, the 3.1-hectare site at 17-21 Ashby Close will accommodate the new workshop and transport yard of local owner-occupier, Bruce Rock Engineering, who was seeking to benefit from the exposure and accessibility offered by the adjacent Roe Highway.

Matthew Hopkins and Ben Widdowson of Savills Industrial & Logistics brokered the deal via private treaty on behalf of Perdaman Group, saying they fielded interest from a range of developers and owner-occupiers.

“Bruce Rock Engineering identified the advantages of the superior road connectivity and road-train access,” Mr Widdowson said.

The sale comes on the back of the industrial market boom in Australia’s eastern states.

“We are starting to feel the flow-on effects of the significant increase in demand here in Perth,” Mr Hopkins said.

“Coupled with signs of business activity and confidence returning locally, industrial land is likely to be one of the fastest beneficiaries of this positive shift.”

He went on to say that land sales in the area had lagged since the downturn in 2014 but increased enquiry throughout the past six months had translated to a strong upswing in parties progressing to the offer stage.

“Pricing is recovering significantly this year, close to previous highs, and likely to increase as demand increases,” he said.

“Availability of remaining lots in the precinct is now limited, and with two other lots in the area already under contact and advanced discussions with owner-occupiers and developers on other opportunities, we expect to see several more sales in the coming months.”

Mr Widdowson said that the renewed interest in industrial property along the eastern seaboard from institutional investors had not yet impacted the local industrial market but was likely to flow through as Perth continued its recovery.

“The eastern states’ logistics markets have already seen the impact of substantial yield compression, rental growth and rapidly increasing industrial land values, driven by the reweighting of industrial as an asset class amongst institutional investors, both on and offshore, and the global move from retail to industrial investment exposure,” he said.

Mr Hopkins said Perth’s core logistics locations were likely to be “big winners” due to geographical constraints, combined with the requirements for ever larger logistics facilities.

“We are currently working on a number of short and medium-term industrial land opportunities in the core eastern logistics market, and we expect to see the opportunities in this space become ever tighter as these few remaining landholdings are absorbed, with limited new supply coming online,” he said.

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