Australian Industrial Horizons

10

LOGISTICS & INDUSTRIAL RESEARCH | INDUSTRIAL HORIZONS

TAKE-UP & YEARS REMAINING

At 210 hectares of land take-up per annum between 2019 and 2023, this equates to approximately one million sqm of GLA with an end value of $4.6 billion that has been delivered each year on average.

Industrial land absorption levels in Sydney have averaged approximately 210 hectares per annum between 2019 and 2023, peaking at approximately 290 hectares in 2022. For 2024, just over 140 hectares of land were absorbed, reflecting the normalisation of demand and lower pre-commitment activity given the previously mentioned constraints. In recent years, take-up activity has been supported by increased data centre demand with approximately 20% of industrial land transactions in Sydney since 2020 being to such operators (for sites of two hectares or more). By submarket, the Outer West has accounted for 40% of all take-up since 2019, driven by Goodman’s Oakdale West estate and initial deals within the Mamre Road Precinct, including The Yards Estate. Take-up in the South West has also been solid (23% of Sydney’s land take-up since 2019), underpinned by the deals within the Moorebank Intermodal Terminal, Stockland’s Leppington Business Park and ESR’s Leppington Industry Park. Take-up has been more limited in the remaining submarkets and stems from the lack of land availability. Years Remaining Based on recent take-up trends, there are 3.9 years of active land supply remaining within the Sydney market while taking into consideration all vacant industrial-zoned land, it’s closer to 13.6 years. As highlighted earlier, a large share of land is owned by owners who are not able to make this land available for development. Considering this, it is estimated there to be less than 3.0 years of active land supply remaining.

Sydney Industrial Land Take-up (hectares)

350

300

250

200

150

100

50

0

2014 2015

2016 2017

2018

2019 2020 2021

2022 2023 2024

10-Year Average

Sydney Industrial Land Years Remaining

Active Land Supply

Total Land Supply

Land Remaining (hectares)

828

2,849

Average Annual Take-up – Base Case (hectares)

210

210

Years of Land Supply Remaining

3.9

13.6