- The 7,435 sqm site is located on Hale Street
- Sale equates to $3,396 per sqm
- Industrial sites in southern Sydney are becoming increasingly rare
A recent sale in Botany has highlighted the strength of the southern Sydney industrial market.
Coombes Property Group acquired the 7,435 sqm site at 2-4 Hale Street for $25.25 million, equating to a rate of $3,396 per sqm.
Coombes Property Group, which develops, owns and actively manages a diversified property portfolio, intends to improve the asset and retain for the long-term.
“We’re delighted to have secured this asset in what we see as a prime location in an extremely attractive segment of the market,” commented Coombes Property Group CEO, Michael Coombes.
Colliers Industrial Director Tom Barnier and Industrial Executive Jeremy Green sold the property, noting that it came with a rare IN1 General Industrial zoning, along with frontage to hale Street and near Foreshore Drive and the M5 Motorway.
“The buyer has historically focussed on acquiring commercial property and this transaction is their first substantial industrial purchase in South Sydney,” said Mr Barnier.
“This signifies the strength of the industrial property market and the buyer’s vision to capitalise on one of the most rapidly growing and highly coveted asset classes in the wake of the pandemic.
“Coombes Property Group has a vision to add value to this site over time, based on there being an extreme lack of industrial land, coupled with record low vacancy levels.
“This is a landmark sale and the price achieved is substantiated by the fact that 2-4 Hale Street is one of the last remaining large-scale development sites remaining in Botany, further adding to the significance of this transaction and highlighting the demand for prime land in South Sydney.”
Tom Barnier, Colliers
Low vacancy
The property comes with a total of 11 leases, on the back of a severe shortage of stock in the region, including in Botany, Mascot and Alexandria.
The Sydney industrial vacancy rate sits at 1.5% with individual precincts often below this level.
“Primarily due to the limited prime assets on the market, we have begun to see that the capital seeking industrial and commercial property has started to shift towards securing development land for investors, aiming to create their own purpose-built assets,” Mr Green said.
“This is exactly what we have seen in this deal and will continue to see in South Sydney as there is still so much unplaced capital to be invested.”
The withdrawal and rezoning of industrial land for alternative uses has also placed significant pressure on the remaining industrial land stocks in the area.
Research conducted by Colliers Research has found that there is only 27.2 hectares of vacant industrial zoned land within South Sydney. Since 2012, over 120 hectares of former industrial land have been rezoned for other land uses.
3 Borrows Road South in St Peters was transacted by Colliers for $11.55 million, as another site poised for strong future industrial development, highlighting this sector of the market’s strength. The 3,617 sqm site sold at a 3.2% yield.
