COLLIERS RADAR

SYDNEY’S INDUSTRIAL LAND SUPPLY

By Sass J-Baleh Associate Director | Research [email protected]

In March 2017 Colliers Research undertook an investigation into ’s Industrial land supply. The industry leading paper provided the number of years of industrial land supply left as well as a projected amount of land when factoring in ‘potential future employment land areas’. Comparing the last paper (which uses 2016 data) to this updated paper (using 2017 data) indicates there is a net increase of industrial zoned land supply within the Sydney Metropolitan Region, however a decrease in the total area of available land yet to be developed (i.e. undeveloped zoned land) – a decrease of around 113 hectares.

Industrial zoned land (IN1, IN2, IN3) in Sydney as at 2017 = 12,308 hectares  123 hectares Industrial zoned land (IN1, IN2, IN3) in Sydney as at 2016 = 12,185 hectares

Business zoned land (B5, B6, B7) in Sydney as at 2017 = 2,792 hectares  205 hectares Business zoned land (B5, B6, B7) in Sydney as at 2017 = 2,587 hectares

Between 2016 and 2017, there has been a net increase of 123 hectares of industrial zoned land – mainly due to rezonings. Over 200 hectares of industrial land was gained as a result of rezoning for industrial uses in 2016, including Moorebank (157 ha), Mamre West in Penrith (47 ha), and Cudgegong Road Station in Blacktown (28 ha). Over the same period, just over 60 hectares of employment land was lost due to rezonings to alternate use – particularly within the North West, Central West, South, and North sub-markets. According to the NSW Government Planning and Environment’s Employment Land Development Monitor there is a greater concentration of industrial zoned land (developed and undeveloped) within the North West and South West sub-markets (representing a combined 59 per cent of the total Sydney Metropolitan Area). The North and Inner West sub-markets’ share of industrial zoned land is only 3 per cent and 4 per cent, respectively.

Sub-Market Defined Map

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Colliers Radar | Sydney’s Industrial Land Supply | July 2018 Share of Industrial Zoned Land 3%

9% 31%

27% North

South 4% South West Outer West 13% 13% West Central Inner West North West To note: includes developed and undeveloped land Source: ELDM / Colliers Research

The most developed sub-markets, with limited scope for further development are:

3 hectaresDeveloped . Inner West (95% developed) 123 ha . North (94% developed) industrial . Central West (93% developed)

oned land 21 hectares Undeveloped Most of the undeveloped land is concentrated within the following sub- markets:

. North West (1,117 ha) . Outer West (714 ha) . South West (705 ha)

It is important to note that total undeveloped land may overstate actual supply. Undeveloped land does not equate to potential ‘developable’ land, as land required for roads, infrastructure requirements and environmental considerations is not deducted from total area size. Undeveloped Serviced Land Undeveloped land that is serviced has greater scope to accommodate users in the short to medium term – i.e. these lands have lead-in water and wastewater infrastructure available for connection. There is currently 663 hectares of undeveloped serviced land (or 15% of the total undeveloped land supply) - that is an additional 167 hectares from the previous year. Most of the increase in undeveloped serviced land was within the Moorebank industrial precinct. The South West has the greatest amount of undeveloped serviced land (271 ha), compared to North West (118 ha), and Outer West (169 ha).

Colliers Radar | Sydney’s Industrial Land Supply | July 2018 Although the South sub-market is regarded as one of the most constrained market with respect to land supply, the lack of supply is experienced within the ‘inner’ South area (i.e. encompassing areas such as Alexandria, Botany, Mascot, Banksmeadow, and Rosebery). There is extremely limited scope for development, with only 8.6 hectares of undeveloped land (all of which is unserviced). As of 2017, the Banksmeadow industrial precinct lost all its undeveloped serviced land supply. The Sutherland Local Government Area (‘outer’ South region), on the other hand, holds around half of the South sub-market’s land supply (or 530 ha) with large scope for industrial development (113 ha of undeveloped land).

Undeveloped Serviced Industrial Land Supply in the Banksmeadow

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Source: ELDM / Colliers Research

Future ‘Employment’ Land Release Areas The table below identifies employment land precincts proposed to be rezoned for ‘employment use’, therefore may also accommodate commercial and retail uses. The potential future employment land, which has been identified in endorsed NSW Government documents will significantly add to the existing stock of undeveloped industrial land in the future. It is important to note that these areas are still under investigation and therefore the total area (6,654 ha) may be overstated. To note, the total future land release supply has decreased compared to the previous year (6,973 ha), and this is mainly attributable to the land release within the Moorebank and Glen Lee industrial precincts.

re cinct LG A Are a ( a )

Catherine ields Camden 73.2 1.1%

uture Industrial Camden 87.6 1.3%

uture Industrial Liverpool 1,124.9 16.9%

emps Creek Liverpool 446.8 6.7%

Lowes Creek Camden 87.7 1.3%

Lowes Creek/Marylands Camden 63.7 1.0%

Marylands Camden 25.5 0.4%

Rossmore Liverpool 40.2 0.6%

Moorebank Defence Lands Liverpool 154.0 2.3%

Glen Lee Campbelltown 45.4 0.7%

Glen Lee Camden 14.6 0.2%

Western Sydney Employment Area Etension Penrith 4,098.5 61.6%

Western Sydney Employment Area Etension Liverpool 391.9 5.9%

G re a te r Sydne y Tota l 6 6 3 1

Colliers Radar | Sydney’s Industrial Land Supply | July 2018 Between the period 2008 and 2016 the average annual take-up rate of industrial land was 157 ha (lowest level equating to 105 hectares per annum and highest level recorded at 264 hectares per annum). Most of the land take-up was concentrated in the western sub-markets over the period.

Industrial Land Take-Up

3 26 2 ) 2 re s 1 t a 2 171

(e c 157 1 123 Up 11 117 121 1 e

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ndustrial TaeUp Averae Source: Colliers International

Supply / Demand Gap In order to determine the demand for land moving forward, the average historic land take-up rate have been applied (i.e. 157 ha per annum). This average will be considered the ‘base case’. A ‘high case’ and ‘low case’ of 264 ha and 105 ha per annum (based on the highest and lowest take-up recorded over 2008 to 2016) scenario has also been considered to deduce a range in the years of supply left. Given that there is currently 663 ha of undeveloped serviced land, and taking into account half of the undeveloped unserviced land (i.e. 1,076 ha) equates to 1,739 ha of total land supply. To note: Only half of the total undeveloped underserviced land has been added to the total supply calculations in order to take into account land required for roads, infrastructure requirements and environmental considerations, as well as possible future planning changes to alternate uses (such as residential, retail, commercial land uses) In addition to undeveloped land, taking into account around 30 per cent of the total area set for future employment land release (i.e. 1,996 ha) equates to 3,735 ha of total land supply.

How Many Years of Supply Left? - Based on 1,739 ha Total Industrial Land Supply

ase Land Tae-Up Rate (per annum) ears o Supply Let Low Case 105 ha 17 years Base Case 157 ha 11 years igh Case 264 ha 7 years

To note: Only 30 per cent of the total potential future employment land area has been added to the total supply calculations, as these areas are subject to further investigations at the precinct planning stage to assess suitability for development (e.g. riparian corridors, slope, vegetation, transport corridors, local roads and lot fragmentation). Furthermore, these areas are set for ‘employment’ uses and therefore also encompass retail and commercial space.

How Many Years of Supply Left? - Based on 3,767 ha Total Industrial Land Supply

ase Land Tae-Up Rate (per annum) ears o Supply Let Low Case 105 ha 36 years Base Case 157 ha 24 years igh Case 264 ha 14 years

The majority of the future land supply areas is likely to be released in line and following the Western practical completion.

Colliers International does not give any warranty in relation to the accuracy of the information www.colliers.com.au contained in this report. If you intend to rely upon the information contained herein, you must take note that the information, figures and projections have been provided by various sources and have not been verified by us. We have no belief one way or the other in relation to the accuracy of such information, figures and projections. Colliers International will not be liable for any loss or damage resulting from any statement, figure, calculation or any other information that you rely upon that is contained in the material. © Colliers International 2018. Accelerating success.