The Sydney suburb of Botany is prime land for both industrial and residential, with the two fighting it out for space. Image – Canva.
  • 461.4 sqm vacant land sold for $1.35M in Sydney
  • Suburb of Botany highly sought after for industrial and residential
  • Owner-occupiers outnumber investors 3:2

A 461.4 square metre parcel of land was recently sold in the Sydney suburb of Botany, New South Wales for $1,350,000, which works out to around $2,925 per square metre.

The sale was made by Savills to K and T Properties and is located at 2 Erith Street. Zoned B7 Business Park, the site had significant interest, Sam Wallace of Savills said he received over 90 enquiries and multiple pre-auction offers.

CBRE has also been active in surrounding areas, the company is close to selling off all 17 strata warehouses in Banksmeadow, and another development in the suburb has already made $40 million in sales, 82% of the project is sold, with construction for Precinct 45 expected to be completed in January.

What’s the market like?

CBRE’s Head of South Sydney Industrial, William Gathercole, told The Property Tribune that: “The industrial market in Botany has performed well over the five-year average.”

“We have seen a lot of industrial land been lost to residential development which in turn has put pressure on the supply of industrial land.”

William Gathercole, Head of South Sydney Industrial, CBRE

Mr Gathercole added, “Demand is not contained to Botany, with industrial within the 8km radius of the Sydney CBD and Port Botany highly sought after amid a boom in e-commerce and last-mile delivery.”

Enough room to swing an industrial cat?

It may seem odd: how can a small plot wedged between an airport and Sydney’s finest mansions serve the booming e-commerce industry?

The Property Tribune reported on just that earlier this month, while the large, roboticised fulfilment centres of the future serve an important purpose. micro-fulfilment centres (MFC) were gaining traction.

A Knight Frank report on urban logistics said an MFC is a “small-scale or compact warehouse facility usually located in accessible urban locations close to the end consumer they are servicing.” It services many models of online shopping, from delivery to click and collect.

Suffice to say, the delivery game doesn’t have a one size fits all solution, but MFCs were an important part of the equation.

A mini-boom

Mr Gathercole said “Demand for micro developments is extremely high given the e-commerce boom. CBRE is currently selling a number of major industrial/micro warehousing projects in the Port Botany location.”

Owner-occupiers are also outnumbering investor buyers, a trend that is similar to that seen in residential real estate; Mr Gathercole said the ratio is 3:2, but investors are chasing 5% yields in industrial property, as compared to 2% in residential.

Pent up demand and supply scarcity of course have an impact on price, Mr Gathercole said CBRE was selling industrial units between $7,000 – $9,000psm for sizes between 100-600sqm and up to $10,000psm for units < 100sqm. Industrial Land values in Botany are over $3,000/sqm for unimproved land compared to $5,500psm in Alexandria.

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