Australia’s first multi-storey industrial asset hits the market

30 March 2023

A state-of-the-art two storey logistics asset of 19,757 square metres in Australia’s highest performing industrial market, will be the first of its kind to come to market nationally on 30 March 2023, with potential for over 450,000 sqm of multi-level warehouse space to be delivered across Sydney in the next three years.

42-52 Raymond Avenue in Matraville occupies around 250 square metres less land than building area, in a precinct with an acute shortage of warehouse space and limited developable land. Designed to optimise the opportunity presented by Matraville’s rents, which can be 60% more expensive than other areas in Western Sydney. Part of the ground floor of the prize multi-storey industrial asset is already pre-leased.

Due for completion in December 2023, the innovative multi-storey logistics facility with a strong net passing income of $6,683,100 ($338/sqm) per annum, provides the rare opportunity to lease to multiple tenants (with spaces ranging from 5,000 – 5,020 sqm) in the coveted South Sydney industrial market.

With around 63% of South Sydney’s multi-storey pipeline for the next two years already pre-committed due to significant occupier demand for new warehouses, the prize institutional-grade investment opportunity is listed by Colliers’ Head of Industrial Capital Markets Gavin Bishop, National Director Michael Crombie, and Director of Industrial Capital Markets Sean Thomson, on behalf of LaSalle Investment Management.

“Never has an opportunity been presented within the Australian investment market for 100% interest in a premier multi-storey logistics facility of commanding scale, located within Australia’s strongest industrial market.” Mr Bishop said.

“Positioned approximately nine kilometres from the Sydney CBD and adjacent to the global gateway hubs of Sydney Airport and Port Botany, Matraville is one of the country’s tightest institutionally held last mile logistics markets.

“Occupiers are prepared to pay the significant premium rents of South Sydney, due to the transport cost savings and ability to position stock and materials closer to their end consumer.”

Positioning closer to higher density locations can deliver significant savings, since transport costs usually account for up to 50% of an industrial occupier’s overall supply chain expenses, while real estate typically only accounts for less than 10%. Occupants of multi-storey warehouses can also save on statutory costs, which are diluted by the increased building area.

“The demand for industrial space is being driven largely by a surge in consumption and e-commerce, broadening of the manufacturing base, and occupiers increasingly looking to shield themselves from port and shipping delays.” Mr Crombie said.

“Despite broader economic headwinds and softening yields, industrial investment activity remains buoyant with $7.9 billion trading in 2022, the second highest annual volume on record.” Mr Thomson added.

The depth of demand for industrial asset has seen the South Sydney market witness an influx in plans for multi-level developments over the past year, and the first to be delivered to market following 42-52 Raymond Avenue include the Goodman Axis Estate at 45 Burrows Road, Alexandria (16,078 sqm), Charter Hall’s Ascent on Bourke at 520-530 Gardeners Road, Alexandria (25,803 sqm) and LOGOS’ 28-30 Burrows Road, Alexandria (7,200sqm).

Pre-commitment levels for 28-30 Burrows Road, Alexandria, and Ascent on Bourke are currently 100% and 80%, respectively.

In addition to the prime location, 42-52 Raymond Avenue at Matraville also comes with the latest in industrial design, superior quality office accommodation, staff amenities and an abundance of on-site parking.

Operations are also enabled 24/7 at 42-52 Raymond Avenue, which boasts a Breezeway on both levels offering undercover loading areas, functional ramp access to level one, Heavy duty floor slabs with minimum six tonne racking post loads and ESFR sprinklers.

With a floor-to-floor height of 8.5 metres on the ground level and a floor-to-ridge height of 13.7 metres on the first level, the facility is suitable for semi-trailers and one-way vehicle circulation for trucks and cars.

LaSalle Investment Management, and development partner Hale Capital Partners, are excited to bring the ground-breaking modern logistics asset to market.

LaSalle’s Co-Heads in Australia Simon Howard and Michael Stratton anticipate the asset will attract substantial interest given its prime location and the current tight occupier market.

“The forward sale of this superior prime facility had always been contemplated by the team.” Mr Howard said.

“The 19,757sqm two-level facility commenced construction in January 2023 and is currently 23% pre-committed, with completion expected at the end of 2023.”

Hale’s Joint Managing Director Nicholas Bradley added “We are excited to deliver for our client LaSalle Investment Management one of the first large-scale multi-storey industrial developments in Australia”

“Our development pipeline has targeted key infill locations across the Eastern Seaboard that continue to see supply and demand imbalances with occupiers needing to be located near population centres.”

42-52 Raymond Avenue, Matraville is being offered for sale via International Expressions of Interest closing 3:00pm (AEST) Wednesday, 3 May 2023.