Located at the intersection of the M7 and M4 Motorways, WSEA is the largest new employment space in the metropolitan area, and includes major precincts such as Eastern Creek and Erskine Park.
The existing WSEA comprises 2,200 hectares of industrial zoned land that has gradually been developed over the past 12 years.
Land supply will further be supplemented by the additional 4,357ha earmarked for employment usage within the Broader WSEA extension area.
Despite the presence of this land, supply of land for immediate development remains constrained due to a lack of undeveloped land being both serviced (connected to water and sewer) and appropriately zoned.
Knight Frank’s Director of Industrial, David Hall, said this provides opportunities for existing land holders, who are able to provide serviced land, to control market share over the next two to three years.
He said this applied to private owners of land that is currently zoned or easily zoned. Going through the zoning process could take up to two years to have it ready for use.
“This presents a great opportunity for land owners who can control the market share because there are so few players in this space.”
David said land restrictions in other regions made it difficult to secure large parcels of land for industrial development in those areas.
“With the bulk of land supply unlikely to be readily developable within the next three years due to factors such as zoning and acquisition lead times, current land owners with appropriately zoned land have an opportunity to be active players in the current pre-commitment cycle with competition broadly limited to some institutional developers and larger private land owners. For example, DHL recently secured just over 58,000sqm in Oakdale.”
He explained that logistics companies represented a growing sector that wanted to move to the WSEA region.
“There are several factors for this such as access to labour, good road infrastructure, traveling times, cost of transport (because of improved road infrastructure), and access to a second airport.
Mr Hall went on to say however, that larger private land owners are now being more proactive in their development strategies and are showing a greater propensity to start competing in the pre-lease market.
“Larger private land owners have the potential to compete in the short term development cycle. Although they have shown limited urgency to progress the development of land holdings to this point in time, they are now being more proactive in their development strategies by spending capital to bring services to undeveloped land in addition to sourcing potential tenants.
AT A GLANCE
• There is a lack of serviced land available for immediate development due to factors such as servicing costs, re-zoning and acquisition lead times.
• Current land owners with appropriately zoned land have an opportunity to be active players.
• The private sector is the largest land holder of undeveloped, zoned land in the WSEA precinct, accounting for 44% of the total.
