ESR have acquired a large infill land holding located within one of Sydney’s most tightly held industrial precincts and earmarked for a new multi-storey logistics redevelopment.
The redevelopment site was sold off-market by Leda Holdings to ESR following an exclusive campaign by Colliers’ Gavin Bishop, Trent Gallagher and Sean Thomson.
ESR will pay a massive $152m for the 7.71ha site at 286 Horsley Road which Leda Holdings paid $52million for in 2018.
The site represented a unique redevelopment opportunity with significant income and 300m of street frontage to Horsley Road. Rarely does such a large infill holding come to the market, given the diminishing supply of industrial land in South Sydney. The site signified the perfect opportunity to capture occupiers from inner ring locations and benefit from the projected strong rental and capital growth in the future.
Rob Ell, Managing Director of Leda Holdings, said: “Leda are looking to continue their long-proven strategy in targeting large-scale infill sites for development or repositioning.
“We have been extremely active over recent years rolling-out this straetgy. Some of our major acquisitions include 32 Cawarra Rd, Caringbah (ex. J&J manufacturing site), 1 Box Road, Taren Point, 247 King St, Mascot, and 19-21 Loyalty Rd, North Rocks. All of these site were sold to Leda via Colliers, cementing the strong relationship between both firms.”
The purchaser intends to redevelop the site into a multi-level logistics estate, capitalising on the 1:1 FSR and unlimited height restrictions. The proposed new multi-level redevopment of the site will be the first of its kind within the immediate area.
Gavin Bishop, Managing Director of Industrial and Head of Industrial Capital Markets at Colliers, said: “The Australian industrial and logistics sector has recorded phenomenal growth over the past two years, supported by macro economic tailwinds which have underpinned both occupier and investment demand.”
Trent Gallagher, National Director Industrial at Colliers, said: “Demand for industrial land in Sydney continues unabated as institutional groups adopt a build-to-core strategy. Continued yield compression and limited buying opportunities have made it more challenging to acquire stabilised assets, and as a result, major institutions seek brownfield redevelopment opportunties.”
Sean Thomson, Head of Industrial Capital Markets NSW at Colliers, said: “The e-commerce phenomenon has created an unprecidented level of demand for logistics infrastructure, with assets and sites of scale positioned within infill locations trading for premiums, as investors capitlaise on the strong rental growth prospects.”
Multi-storey warehousing will spread into more areas of the city, with schemes already underway in South Sydney. The wave of new projects could dramatically intensify land use and see new logistics hubs spring up.
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