Unusual site conditions have been overcome by Orica who has completed an $82.5m deal with Goodman for the sale of their Banksmeadow site.
The 39,950sqm property at 28 McPherson Street has significant site conditions including being part of a flood retention basin for the area and a site with significant ground water contamination.
The contamination dates back to the 1940s and 1960s when leaking tanks and drums containing chlorinated hydrocarbons (CHCs) entered the sub soil. Orica took responsibility for managing the groundwater contamination throughout the Botany region and with ongoing activities to extract and removal the contaminants.
As part of the mitigation works, Orica were required to retain a flood water retention basin in Banksmeadow which would serve to help prevent the contaminants from entering Botany Bay. The retention basin is largely contained on the whole of the site at 28 McPherson Street.
Notwithstanding this, the site is well located with excellent access to Sydney Airport, the Eastern Distributor, the M5 Motorway and Port Botany and remains one of the few undeveloped parcels of land in the area.
In April 2021, Orica were successful in obtaining a State Significant Planning Permit to develop the site for warehouse & logistics purposes, however to overcome the site conditions, some extraordinary measures will be taken.
The approved scheme requires the construction of an elevated concrete platform to support buildings and hardstand areas with a minimum clearance height of 2.5 m above the flood storage area below.
Once the suspended slab is built, a Site Audit Statement can be issued to enable the development to proceed on the site without the risk of further disturbance of the ground below. The approved plans provides for two new warehouse buildings to be built with a combined gross floor area (GFA) of 19,780sqm, (each with a maximum building height of 13.7m) and two ancillary offices with a combined GFA of 2,000sqm.
Following the approval, Orica appointed Colliers International’s Gavin Bishop, Michael Crombie and Sean Thomson to broker a deal on the Banksmeadow property.
Goodman agreed to acquire the property settling the site with Orica in early September. The purchase price represents $2065/sqm of site area and represents one of the highest rates paid for undeveloped land in the area.
EG Funds Management recently acquired a developed site at 81 Beauchamp Road Matraville for their ACE Fund at a rate of $3,551/sqm. The 9,294sqm site was developed with 6,319sqm of GFA.
Goodman already own the vast majority of the land and industrial estates in Port Botany area, most of which are fully developed. The additional 4ha will add to the Groups ability to offer purpose built facilities in a highly sought after location near to the Port.
Jason Little, CEO – Australia, Goodman Group said “This acquisition forms part of Goodman’s strategy to meet the increasing demand for strategically located logistics space with easy access to large consumer markets. Redevelopment of brownfield and infill sites, like this Banksmeadow property, are in high demand by our customers and are supported by the public sector. Such developments are beneficial to the environment as they reduce the amount of greenfield land developed, re-use existing infrastructure, and because they are close to consumers, they lower transport-related emissions.”
Colliers marketing materials indicated that the approved scheme could be enhanced by a 2 level warehouse facility, something which Goodman are already proceeding with (in conjunction with Altis) at 202-212 Euston Road, Alexandria.