Latest Luddenham Land to Sell

A 10 hectare parcel of land in Luddenham is the latest land parcel to sell near the Western Sydney Airport and Aerotropolis.

The property at 869 Luddenham Road was sold for $30m by the Sydney Society of Model Engineers who had held the property for 50 years.

The property is within a few 100m of the entrance to the new Sydney Airport in an area often referred to as the Northern Gateway.

The current planning documents for the Northern Gateway indicate a large part of the site is earmarked for Enterprise & Mixed use developments, including bulky goods and high tech industrial.

The purchase price represents around $300/sqm which is equivalent to several recent land sales in the Mamre Rd, Kemps Creek corridor which is likely to be developed first.

In October last year, GPT acquired a series of parcels at 754 – 784 Mamre Rd for $100m equal to approx $327/sqm.

Land in Luddenham has generally been much cheaper with large properties previously selling for $120/sqm – $175/sqm. In November 2020, Goldmate Properties acquired a 31ha parcel for $33m ($104/sqm), however only about 15ha of land was available for development, suggesting an equivalent rate of $220/sqm.

The NSW Roads & Maritime (RMS) department have also acquired off market a number of parcels of land near the Model Society property to make way for the planned M12 Motorway which will connect the M7 Motorway, the Airport and the upgraded Northern Road. In August 2019, RMS paid just $132/sqm for 752 Luddenham Rd.

Mark Litwin and Grant Bulpett of Knight Frank ran an Expressions of Interest campaign on behalf of the Model Society.

Mr Litwin said there was intense demand for the block during the sales campaign with interest from institutionally-managed money and private capital, with buyers coming from both locally and overseas.

“This property was sold during the COVID lockdown and despite ongoing rezoning issues in the area, demonstrating the quality of the asset,” he said.

“It is one of the last large format blocks in the Northern Gateway Precinct of Aerotropolis, which has emerged as the pre-eminent precinct for sophisticated developers and land investors alike, due to the large site areas, and resultant limited acquisition opportunities.

“This was a super premium site in a superior position within the Northern Gateway Precinct, situated close to the main entrance to the new terminal, surrounded by the new motorway network, with a large site area, relatively flat and a huge ratio of developable land.

“It also had limited possible detrimental influence from proposed planning outcomes, making the reward more attractive than the risk for buyers.

“The site is totally unencumbered by riparian constraints, which make it one of a kind.”

Mr Bulpett said the profile of capital in Aerotropolis was quickly changing as Western Sydney continued to expand at a rapid rate, with regular government announcements about investment into transportation infrastructure initiatives and land release.

“Each time Government makes an announcement about planning or infrastructure, some buyers leave while new buyers enter the market,” he said.

“Increasingly we’re seeing boutique and institutionally managed money participate, and that money hasn’t been active in these large parcels before.

“We struck a perfect balance with the marketplace on this site, getting that really premium financial outcome over the settlement period that a site like this deserves.”

Mr Litwin said Knight Frank took a lot of pride in this appointment to represent the Society. 

“Their long run needs to financially and contractually protect the next 100 plus years of their existence was always front of mind for us. 

“We had to bring the very best property professionals to the table who could get a grip on the planning in the Aerotropolis to get the best result.”

Chairman of the Board of the Society David Kennedy said with all the development occurring within the Northern Gateway Precinct of Aerotropolis, the timing was right to sell and capitalise on these changes.

“The board and the society’s members are understandably delighted with the outcome. 

The successful sale of the Luddenham Road property will allow the Society to commence a new chapter in its 115-year history.

“We will now look for a new home to develop a new Model Park.”

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About Warwick P

Warwick has over 25 years of property investment and management experience. Principally responsible as Managing Director for Capital Management Australia and Joint Managing Director for Chauvel Capital Partners and Editor of Australian Property Markets News.

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