Adbri rides the industrial heat as Sydney surges

Sydney industrial land is still white hot. Picture: Lisa Maree Williams/Getty Images

Listed companies are capitalising on the underlying land values of their holdings by selling into the still hot industrial development market in Sydney.

In one of the latest deals, building materials company Adbri has finalised the sale of its holdings in Moorebank as it disposes of surplus land holdings. The company reaped $57m from selling off 20 Kelso Cres, with Singaporean group Mapletree picking up the property – which was billed as one of the area’s best redevelopment opportunities.

In the short term, the property has a 12-month leaseback to Adbri. The company said the sale of the masonry production site realised a before tax accounting gain of $45.5m.

While the Singaporean company is yet to reveal its plans it could join the ranks of multi-storey industrial projects which are under way in Sydney.

The play comes at a time when urban infill sites are trading at a premium as companies shake up their supply chains.

The Moorebank holding spans 35,200sq m and the area is underpinned by historically low vacancy rates and demand from occupiers. Southwest Sydney’s vacancy rate is at just 0.1 per cent, with very high tenant demand, and the area has seen rental growth of 30 per cent to 50 per cent.

The property was sold by Adrian Balderston, Sean Thomson, Fab Dalfonso and David Hall when all the agents were at Colliers.

Mr Hall and Mr Dalfonso have just taken on senior roles at Cushman & Wakefield and they are bullish about the prospects of the industrial sector despite local and global economic headwinds.

The firm’s research shows the industrial land market, especially in NSW, is expected to grow even tighter, coupled with significant positive tailwinds and upward rental shifts.

Cushman & Wakefield head of industrial and logistics Tony Iuliano said Sydney was also heavily constrained from an opportunity to acquire perspective, as well as in relation to timing of bringing land online.

He cited delays in planning, servicing, and construction as putting further constraints on the western Sydney land market.

“Total vacancy in the existing market will continue to remain constrained over the coming 12-24 months, with continued levels of unplaced tenant demand and continued high levels of lease renewal rates,” he said.

Mr Hall joins as national director, head of brokerage industrial and logistics, after more than 15 years in the market. Mr Dalfonso will be national director, brokerage industrial and logistics, Sydney South West.