RESEARCHRESEARCH Key Facts NSW State Government plans to spend $72.7 billion on infrastructure investment over the in Australia for world class infrastructure next four years. Overview The New South Wales economy and transport networks (Figure 4). In Federal Government has continues to strengthen, fuelled by the addition, the Federal Government has committed to an $18 billion State Government’s strong fiscal committed to an $18 billion infrastructure infrastructure package for NSW management which has recorded a $4.5 package for NSW over the next seven over the next 7 years. billion surplus for 2016-2017, with an years. anticipated budget surplus of $2.7billion NSW State Government recorded Sydney is currently in the midst of an for 2017-2018. Under pressure from the a surplus of $4.5 billion for 2016- infrastructure boom with an growing state economy and population 2017 with an expected surplus of unprecedented amount of funds being in Greater Sydney, which is currently $2.7 billion for the following directed towards building a new airport as home to over 5 million people - with this period. well as roads, tunnels and railways (Figure expected to grow by 13% to 2025 - 5). As Figure 2 illustrates, the value of Sydney’s infrastructure network will need to continually evolve to keep up work commenced in NSW for transport with demand. infrastructure engineering as at December 2016 was $5 billion with an– Annual Transport infrastructure in Sydney has Moving Average (AMA) of $2.8 billion, long been considered second-rate in which includes the WestConnex, NorthConnex and Western Sydney comparison to other major global cities. Infrastructure Plan (WSIP) projects. Sydney has long suffered chronic traffic congestion for motorists and a public However, more of note is the pipeline of transport system considered inefficient works which is yet to be done, which at by commuters. However the State December 2016 was $13.55 billion—AMA Government’s plan to spend $72.7 $11.6 billion, 38% higher than 12 months billion on infrastructure works over the Research Analyst prior, thus emphasising the Government’s next four years is set to be the catalyst Follow at @KnightFrankAu commitment to infrastructure spending. INDUSTRIAL Port Botany and IMT. Furthermore precinct which will service the airport in industrial demand in South West Sydney conjunction with 3PL, online retailers and IMPLICATION is expected to increase as businesses transportation providers, benefiting from want to be located around the new IMT. easier access and closer proximity to air Whilst these projects will have significant At the same time demand for warehouse freight. implications on a broad mix of industries space in the inner suburbs of Sydney may and general population, for the industrial significantly decline as they become less The two major infrastructure projects sector, they will ultimately shape and desirable for industrial users and face currently under construction in North determine the direction and magnitude greater redevelopment pressure. West Sydney include Sydney Metro of demand for industrial space in Northwest and the NorthConnex tunnel Sydney. Infrastructure projects of note The $3.6 billion WSIP, funded by the projects. The Northwest Sydney Metro which will have a significant impact for Federal Government over the next 10 stage ($8.3 Billion) is one of Australia’s the industrial sector include the years, includes major road upgrades to biggest transport infrastructure projects WestConnex, NorthConnex, Sydney Northern Road, Bringelly Road and the which will deliver 8 new stations across Metro, Moorebank Intermodal, WSIP introduction of the M12 Motorway which North West Sydney connecting Rouse and the Western Sydney Airport. will link the M7 and the upgraded Hill to the existing Chatswood railway. Northern Road. These projects will One of the contributing factors to improve connectivity across greater Furthermore the NorthConnex project will Sydney’s traffic congestion and Sydney and improve transport times for deliver a 21km tunnel for motorists inefficient container movement stems industrial occupants in Western Sydney in between the M1 Pacific Motorway and from the Sydney metro region being addition to aiding the Western Sydney the Hills M2 Motorway. This will provide almost solely dependent on Port Botany Airport upon completion. Additionally the the much needed overhaul for for container freight along with road State Government funded WestConnex infrastructure for the North West, easing transportation being the dominate project, due for completion in 2023, will congestion and supporting the North means of freight movement. With freight ease congestion and connect local West Priority Precinct experiencing movements expected to more than communities. unprecedented development. double at Port Botany by 2030 (Figure 3) the addition of the Moorebank The new Western Sydney Airport, set to The NSW Government announced its Intermodal (IMT) will provide an open by 2026, will become a major plan for the Sydney Metro West project in alternative and efficient solution for economic driving force for the Western late 2016. Upon completion in late 2020s container freight movement between Sydney region. The airport will generate it will provide a metro service between Port Botany and the broader Sydney approximately 30,000 new jobs once open the Parramatta CBD and Sydney CBD via region. and rejuvenate the Outer Western suburbs Sydney Olympic Park. The metro will of Sydney with the infrastructure and bolster the area as a commercial and Upon completion, the IMT will reduce amenity that will support the airport. On residential hub and thus industrial users freight traffic along key arterial roads via the back of this, the industrial sector will in inner west Sydney will continue to the dedicated rail freight line between benefit from a newly formed industrial contract and move elsewhere. NSW Government Infrastructure Budget NSW Engineering Construction Projected TEU Movements from Port Botany $ Billion value, four year forecast By selected sectors*, annual moving average Based on TEU volumes growth of 5% per annum $80 5 Millions $12 Bn $70 $10 4 $60 $8 $50 3 $40 $6 $30 $4 2 $20 $2 1 $10 $0 $0 0 Jun-2009 Jun-2010 Jun-2011 Jun-2012 Jun-2013 Jun-2014 Jun-2015 Jun-2016 Jun-2005 Jun-2006 Jun-2007 Jun-2008 2021 2023 2016 2017 2018 2019 2020 2022 2024 2025 2026 2027 2028 2029 2030 Dec-2009 Dec-2010 Dec-2011 Dec-2012 Dec-2013 Dec-2014 Dec-2015 Dec-2016 Dec-2005 Dec-2006 Dec-2007 Dec-2008 2015-2016 2013-2014 2014-2015 2016-2017 2017-2018 2012-2013 VALUE OF WORK DONE Road Moorebank IMT Enfield IMT Other IMT VALUE OF WORK COMMENCED VALUE OF WORK YET TO BE DONE 2 NSW TRANSPORT INFRASTRUCUTRE INSIGHT JUNE 2017 RESEARCH Key Transport Infrastructure Projects* Strathfield Selected Major Sydney Infrastructure Projects Timeline* South West Rail Link Sydney Metro (Northwest) Western Sydney Infrastructure Plan WestConnex NorthConnex Melbourne and Brisbane Inland Rail Western Sydney Airport Sydney Metro (City & Southwest) Moorebank Intermodal Freight Terminal Parramatta Light Rail Sydenham to Bankstown rail Corridor South West Rail Link Extension M12 motorway Outer Sydney Orbital (M9) Sydney Metro West 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 3 RESEARCH & CONSULTING Marco Mascitelli Research Analyst +61 2 9036 6656 [email protected] Alex Pham Senior Research Manager +61 2 9036 6631 [email protected] Luke Crawford Senior Research Analyst +61 2 9036 6629 [email protected] INDUSTRIAL Matthew Lee Director, Industrial +61 2 9761 1874 [email protected] Alex Jaafar Director - South West +61 2 9733 0186 [email protected] Terry Hassan Director - South West +61 2 9733 0187 [email protected] Peta Antoniou Director - Head of South Sydney +61 2 9036 6749 [email protected] NATIONAL Tim Armstrong Head of Industrial, Australia +61 2 9761 1871 [email protected] Data sources used for this report include; Department of Transport and Main Roads, Greg Russell Department of Infrastructure and Regional Development, Transport for NSW, NSW Head of Industrial Investments, Australia Government, NSW Department of Planning and Environment, NSW Roads and +61 7 3246 8804 Maritime Services, Moorebank Intermodal Company, Australian Bureau of Statistics [email protected] (ABS), Cordell Connect VALUATIONS Lachlan Graham Divisional Director +61 2 9028 1132 [email protected] Sydney Industrial Sydney Suburban Build-To-Rent The Wealth Report Vacancy Analysis Office Overview Insight 2017 April 2017 March 2017 April 2017 Knight Frank Research Reports are available at KnightFrank.com.au/Research Important Notice © Knight Frank Australia Pty Ltd 2017 – This report is published for general information only and not to be relied upon in any way. 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