ISSUE 167 | MARCH 2024 | 02 9630 8000 WWW.BAWDENS.COM.AU I N D U S T R I A L Trends In e-Commerce Fulfilment and Industrial Property Use Industrial Property in Short Supply in 2024 Industrial Land Values Outlook The Rise of Industrial Property Values
IN THIS ISSUE OF INDUSTRIAL PROPERTY NEWS ISSUE 167 | MARCH 2024 | 02 9630 8000 | PAGE 2 We explore the relationship between e-Commerce trends and industrial property use. MARKET INSIGHT SPECIAL Trends In e-Commerce Fulfilment and Industrial Property Use Bawdens is one of Sydney’s largest specialist Asset Managers for clients who own industrial property housing the city’s small-medium enterprises (SME). In the first of a two-part series, Bawdens recently released private client research that identified trends as to how our tenant SME’s are utilising their warehouse space today. The emergence of the importance of fulfilment is because increasingly SME’s are completing their own online fulfilment from their warehouse be that 200m2 or 2,000m2 space. Until recently, fulfilment from online customers of SME’s was outsourced to large specialist fulfilment providers. In 2022 in Australia, 82% or 9.4 million households made an online purchase valued at $63.8 Billion. In 2019, this was $28.6 Billion which highlights the continuing growth in online businesses. Today, we observe small-medium enterprises (SME) are increasingly sophisticated, agile and are taking market share from large multinational organisations. In a recent survey of lessees, we identified some of the following trends driving the desire of our SME tenants to invest and compete in the online universe: • The pandemic has changed the way consumers are prepared to shop. • Consumers want to support a local business online. • Social media commerce favours the SME. (In the US in 2022, the value of this trade source was $289 Billion and is projected to grow to $604 Billion by 2027.) • Improving reliability of connectivity and the advent of online shopping events like Black Friday. • Where appropriate, machine learning technologies are becoming increasingly available to SME’s that allow a (local to consumer) SME to deliver an individualised buying experience. • Our lessees have cited that having a mobile friendly website provides a competitive edge as more and more people are using their mobile devices for online shopping anywhere, anytime. In part two of our series, we consider how the future growth in online commerce will impact the demand for SME industrial property. L-R: Robert Ally - Director, Ben Rodriguez - Director Asset Management, Bechara Taoum and Tony Youssef - Associate Directors Asset Management Y
As Real Estate Agents and Property Asset Managers, we conduct ourselves based upon a commitment to our vision to simplify, adapt, lead and grow our corporate property services. Our mission to connect people, organise, maximise and transact corporate property has meant as a group of professionals we have continued to thrive. The reason we continue to be a growing company today is because we remain aware that our purpose is to proudly protect our clients and earn their honest appreciated trust and friendship. VISION To simplify, adapt, lead and grow our corporate property services PURPOSE To proudly protect our clients and earn honest, appreciated trust and friendship MISSION We connect people, organise, maximise and transact corporate property VALUES Integrity, Passion, Leadership and Trust Our Why’ Story | PAGE 3 BAWDENS NEWS YLEASED BY The Couta Group Pipes up in Wetherill Park Currently based in Wetherill Park, The Couta Group Pty Ltd has relocated to a freestanding modern warehouse situated at 10 Cavasinni Place. The property being 1,101m2 in size, providing 10-11m of clearance was secured on a term of 5 years + 5 years, at the asking rental of $236,715.00 pa net reflecting $215.00 psm + outgoings + GST. The deal was completed by Bawdens Director Robert Ally. Our asset management team can maximise the value of your asset. Lease Negotiations Rent Reviews Outgoing Audit Transaction Management Make-Good Management www.linkedin.com/ company/bawdens Follow us on LinkedIn • Stay informed • Find out what transactions we have just completed • Be up to date with the current market offerings Leasing or buying Leasing Buying 42% 58% AUCTION Girraween 2,150m2 approx. Highly Exposed Freestander with Power & Cranes • Freestanding warehouse/office facility • Access via three (3) roller shutter doors • Internal clearances reaching up to 7.9m (approx.) • Triple driveway access and a generous hardstand yard area providing good container access, truck access and manoeuvrability • Ample on-site parking • Site area 3,776m² Robert Ally: 0413 758 658 John Tanna: 0419 124 544
| PAGE 4 BAWDENS NEWS YLEASED BY Flex Tyres, Batteries and Mechanical Ties up in Silverwater Previously located a few doors down from 9 Vore Street, Silverwater, a mechanical/tyre business trading as Flex Tyres, Batteries & Mechanical has now leased this freestanding warehouse space. The premises measuring a total of 556m² was leased on a term of 5 years + 5 years at the asking rental of $121,754.00 pa net reflecting $215.00 psm + outgoings & GST, without any incentives. The deal was completed by Bawdens Director Terry Saba. For the latest media releases & market trends visit our website www.bawdens.com.au Space in demand 0-500m² 500m² - 2000m² >2000m² 25% 37% 38% FOR SALE Quality New Industrial Units • Premier Industrial Complex • Invest or occupy • High internal clearance for all units • Three (3) phase power • Some units have street exposure • E4 Zoning Central Coast Council • Modern glass façade Victor Zerefos: 0416 047 288 James Zerefos: 0400 326 828 Somersby 164m2 - 536m2 approx. BAWDENS NEWS YSOLD BY Silverwater – High Rate for Low Clearance Warehouse Another transaction completed by Bawdens Director Terry Saba featured a 3.5m tall, low clearance, storage & warehouse space that has just been sold off the market to a private investor at 3/104A Derby Street, Silverwater. The property measuring a total of 164m2 was sold for $1,100,000.00 achieving $6,707.00 psm + GST. FOR LEASE Parramatta 138m2 approx. Office in the Heart of Parramatta • Air-conditioned • Partially furnished • Proximity to Parramatta CBD • Secured car park • Onsite amenities and kitchenette • Partitioned offices • Main Road exposure Anthony Barbanera: 0410 914 662
ISSUE 167 | MARCH 2024 | 02 9630 8000 | PAGE 5 MARKET INSIGHT SPECIAL Industrial Property in Short Supply in 2024 Investors and occupiers of industrial property will continue to largely retain their properties this year, as they did in 2023. The Industrial property sector will remain one of the most desirable asset classes to own in 2024. With rental cash flow growth already outpacing, the growth in rentals from inflation adjusted annual rental reviews, investors understand the ability of this asset class to protect their earning power in a period of inflation. In late 2023, Bawdens completed a survey of a selected groups of tenant businesses whose property they manage for the lessee and the lessor. The survey revealed that many lessees during 2023 expressed not being able to manage the rising expenses and so accepted less profit margin. However, the survey of sentiment identified that most businesses in 2024 will be focused on recovering the required profit margins by increasing prices. For this reason, the survey participants identified there is a growing possibility of resurgent inflation in the year ahead, fueling further growth in the prices of goods and services. The survey participants also identified that price increases would likely still be required even if the interest rates were to rise further in the year ahead. FOR SALE Smithfield 2,047m2 approx. Warehouse/Office with Huge Power • Stated warehouse area includes 254m² Flammable Goods Store • Stated office area includes 112m² mezzanine • Thirty (30) car spaces • Excellent truck access • High clearance warehouse • Secured site Robert Ally: 0413 758 658
ISSUE 167 | MARCH 2024 | 02 9630 8000 | PAGE 6 BAWDENS ASSET MANAGEMENT 2023 - Year of Growth and Leadership We bid farewell to 2023 reflecting on milestones and transformative moments that have shaped the landscape of our organisation. This year has been marked by strategic appointments, key acquisitions, and a substantial expansion of our Asset Management Portfolio. These are the highlights that have defined our journey over the past 12 months. Joumana Tarabay was appointed as an Associate Director as part of our commitment to leadership and growth, steering us towards new heights. Jennifer Ha was promoted to Senior Asset Manager demonstrating our dedication to nurturing and recognising talent within our ranks. Bawdens acquisition of McGees Commercial – 55 properties, totalling 30,000m2 of added GLA to Bawdens Portfolio. This acquisition not only broadens our footprint but also enhances our capacity to deliver value to our clients and partners. Additional 93 New Managements organically grown through our existing relationships. 0.6% vacancy rate across the portfolio for the entire Year of 2023. We are confident that 2024 will deliver equal if not greater opportunities as we set out to continue with our Mission to connect people, organise, maximise, and transact corporate property. Simply search ‘Bawdens’ on Facebook. Like us on Facebook • Stay informed • Find out what transactions we have just completed • Be up to date with the current market offerings Vacancy Rate by m2 Vacant Properties Managed 0.9% Seven Hills 1,374m2 approx. Freestanding High Clearance Facility • Clear span warehouse • Wide roller shutter door • Mezzanine air-conditioned & partitioned office • Good truck access • Secured site Anthony Barbanera: 0410 914 662 FOR LEASE Freestanding Building • Building area of 1,014m² (approx.) • Site area of 1,930m² (approx.) • Close proximity to GWH and M4 Motorway • E3 Productivity Support Zoning • Three (3) roller shutter doors + covered awning Robert Ally: 0413 758 658 | Monjer Khan: 0422 753 262 FOR SALE Minchinbury 1,014m2 approx. YBawdens and Pallet Rak Form Strategic Partnership for Enhanced Solutions Bawdens and Pallet Rak Pty Ltd have joined forces to offer clients a comprehensive range of storage solutions. By combining their expertise, clients now have access to innovative racking designs that optimise storage capacity and streamline warehouse operations. Bawdens’ commitment to excellence, paired with Pallet Rak’s cutting-edge solutions, creates a one-stop shop for all storage needs. Comprehensive assessments ensure informed decision-making and maximise clients’ returns on investment. The partnership aims to revolutionise the storage industry by delivering efficient, tailored solutions and providing ongoing support throughout the process. Through this partnership, our goal is to provide valuable insights into the capacities and capabilities of current and future properties. This empowers our valued clients to make well-informed decisions regarding their facilities, ensuring they are equipped with the most efficient storage solutions available. The team at Bawdens is enthusiastic about facilitating this exceptional service on your behalf. For further information and assistance, please feel free to contact our dedicated team on (02) 9630 8000. Taking Storage to New Heights
Girraween Blacktown Seven Hills Castle Hill Silverwater Minto North Rocks Wetherill Park Seven Hills Smithfield ISSUE 167 | MARCH 2024 | 02 9630 8000 | PAGE 7 BAWDENS NEWS YSOLD BY Seven Hills – Older Style Hits $5,217 per sqm The current tenant occupying 1/18 Bearing Road, Seven Hills has now purchased this low clearance, older style warehouse. This street front property measuring a total of 138m2 in size offers an easy access to main roads and has been sold for $720,000.00 + GST. The deal was completed by Bawdens Director Terry Saba. Peter Pacetta: 0416 001 509 If this is something that you would also like to receive please feel free to contact COMMERCIAL Have you seen our new edition of Vacancy by No. of Properties Vacant Properties Managed 1.4% Freestanding Building • Split into 3 • Land size 1,465m² (approx.) • Invest or occupy- part or whole Robert Ally: 0413 758 658 Anthony Barbanera: 0410 914 662 AUCTION Yennora 1,030m2 approx. Bawdens Deals Done LEASED BY LEASED BY SOLD BY SOLD BY LEASED BY SOLD BY SOLD BY LEASED BY LEASED BY SOLD BY FOR SALE Norwest 4,986m2 approx. Hills Shire DA Approved Residential Commercial • Multiple zoned site offers developers and owner occupiers flexibility • Zoned B1, R3 and SP2 • Prime location in a major growth region of Sydney’s Northwest • Functional rectangular shaped site Victor Zerefos: 0416 047 288
ISSUE 167 | MARCH 2024 | 02 9630 8000 | PAGE 8 MARKET INSIGHT SPECIAL Industrial Land Values Outlook In 2023 rising construction costs and investment yields have tested feasibilities. As a result, land values have steadied in the SME market as developers and owner occupiers have exercised more caution. Currently land values in more central western suburbs range between $1,200.00 - $1,500.00 psm for lots with an area of less than 10,000m2. With most inner west and central west locations offering no availability of sites with an area of less than 10,000m², this lack of developable sites will ensure that current pricing will remain broadly unchallenged, despite the possibility of continued upward pressure on yields due to rising interest rates. Land values will be further supported from the recent and continuing growth in net rentals in the year ahead. These factors, when combined with eventual interest rate certainty, will see a return of owner occupier confidence in long-term appreciation of industrial property resulting in increased demand in the medium term. Seven Hills 2,011m2 approx. Opportunity To Purchase 3 Unit Industrial Complex • Can be sold in one line or individual • Block of 3 units comprising Unit 1: 1,245m² | Unit 2: 391m² | Unit 3: 373m² • Warehouse/air-conditioned office spaces • 40-foot container access • Secured site • 5.5 metre to 6 metre internal clearance • Motorised roller door • Substantial power available Terry Saba: 0416 175 009 FOR SALE Y
Girraween – Sold via EOI – $11,250,000 An owner occupier has purchased 146 Gilba Road, Girraween which is an older style freestanding warehouse measuring a total of 3,340m2 on a site of 8,094m2, located right off the Great Western Highway. This property was sold for $11,250,000.00 representing $3,368.00 psm + GST. The deal was completed by Bawdens Managing Director Barry Cawthorn. ISSUE 167 | MARCH 2024 | 02 9630 8000 | PAGE 9 BAWDENS NEWS YSOLD BY Simply search ‘Bawdens_RealEstate’. Like us on Instagram • Stay informed • Find out what transactions we have just completed • Be up to date with the current market offerings Website Enquiry Real Commercial Commercial Real Estate Google Other 22% 11% 33% 34% AUCTION DAY No Marketing Costs* (T&C’s apply) Lower Selling Fees Higher Prices Auction Day: 4 April 2024 Thinking of selling? • Be part of our Auction Day Sale • Expose your property to one of the largest buyer databases in Sydney • Use our auction negotiation skills to achieve the sale price you want Register your Interest: Call 9630 8000 or contact your preferred Bawdens Agent. FOR LEASE Blacktown 1,070m2 approx. Freestanding Building • Additional mezzanine to rear or warehouse • Secured site • 40-foot container access • Easy access to M2 & M7 motorway Terry Saba: 0416 175 009 Robert Ally: 0413 758 658 Seven Hills 407m2- 847m2 approx. Freestanding Warehouse/Duplex Option • 40-foot container access • High clearance warehouse • Three (3) phase power • Modern air-conditioned office • Unit 1: 407m² (approx.) • Unit 2: 440m² (approx.) • Total: 847m² (approx.) Terry Saba: 0416 175 009 FOR LEASE
ISSUE 167 | MARCH 2024 | 02 9630 8000 | PAGE 10 BAWDENS ASSET MANAGEMENT Asset Management Abandonment to Revitalisation We strive to provide successful outcomes for our clients. When we were contacted by our new client and were advised that their selfmanaged asset was in disarray due to abandonment and damage caused by the tenant, we quickly set out to mitigate further loss and revitalise the premises. Some owners are not aware of the coverage in their insurance policies and the extent to which they can claim. Following examination of our client’s policy we prepared a report, obtained several quotes, and swiftly invoked the owner’s insurance policy to secure full coverage for the incurred damages, allowing us to promptly initiate a comprehensive repair and rehabilitation program to restore the property to its optimal condition. Bawdens successfully launched a leasing campaign that attracted high quality tenants. Additionally, Bawdens was able to negotiate a new tenant that not only appreciated the property’s renewed appeal but also brought a much-needed positive energy to our client. This success story not only highlights our ability to navigate unexpected challenges but also underscores our commitment to proactive property management, turning adversity into an opportunity for growth and improvement. BAWDENS ASSET MANAGEMENT Asset Management Vacancy Rate Office Industrial Retail 3.28% 0.59% 3.57% FOR LEASE Villawood 1,520m2 approx. Secured Freestanding Industrial Warehouse • Fully automated security gates • External awning with 5.4m wide roller door access • 800 amps power supply (approx.) • Energy efficient LED lighting throughout Anthony Barbanera: 0410 914 662 James Zerefos: 0400 326 828 Where it all came from Internet Bawdens IPN Signs Clients 21% 33% 42% 4% FOR LEASE Parramatta 184m2 approx. Refurbished Warehouse • Easy access to main roads • Secured site • Wide range of users • Good truck access • Air-conditioned office • Located just off Victoria Road Terry Saba: 0416 175 009 FOR LEASE Seven Hills 247m2 approx. Industrial Warehouse • Street-exposure • Only 3 in complex • Dual driveway Khang Pham: 0449 931 818 Jarrad Love: 0408 817 025 FOR LEASE Auburn 300m2 approx. Designer Showroom and Office • 72m² high clearance warehouse • Downstairs fully air-conditioned showroom • Open plan office upstairs • Easy access and parking for customers Anthony Barbanera: 0410 914 662 Robert Ally: 0413 758 658 Simply search ‘Bawdens’ on YouTube. Subscribe to our YouTube • Stay informed • Find out what transactions we have just completed • Be up to date with the current market offerings
ISSUE 167 | MARCH 2024 | 02 9630 8000 | PAGE 11 BAWDENS ASSET MANAGEMENT Rescuing Business and Maximising Returns In a remarkable turn of events Bawdens found that a tenant that had exercised their option at the agreed market rental could no longer afford the increased obligations to the business and the lease. Bawdens skilfully negotiated the surrender of the lease, demonstrating their commitment to finding a win-win solution for all parties involved. This proactive and client-focused approach allowed the tenant to gracefully exit an unsustainable lease while ensuring the property owner’s interests were protected. Bawdens successfully found a new tenant to take over the premises on a 3-year lease and at an additional $20 per sqm, maximising the return for our client. Bawdens did not stop at lease surrender but seamlessly transitioned into the make-good process, efficiently restoring the property to its optimal condition. The expeditious handling of the make-good not only showcased Bawdens’ proficiency but also highlighted their dedication to minimising downtime for property owners. This success story serves as a testament to the invaluable role that seasoned real estate professionals like Bawdens play in the commercial landscape. Their ability to adapt, negotiate, and strategically position properties in the market showcases the true value of a trusted partner in the real estate industry. Are you looking to sell your property in 2024? With a 100% success rate, utilising this method of sale you will achieve a price better than you expected, which will allow you to realise your new ambitions. Our In-Room auction facility delivers you the highest probability of an exceptional price. Let Bawdens present your property professionally and use our negotiation skills to deliver you the highest possible price. AUCTION WITH US Register your Interest: Call 9630 8000 or contact your preferred Bawdens Agent. We currently support the following organisations: BAWDENS NEWS YLEASED BY Meridian Industries Expands into Wetherill Park A company that specialises not only in heavy duty truck tarp solutions, but also hydraulic repairs for hoists & tippers and custom tipper modification trading as Meridian Industries have leased premises located at 3 Ross Place, Wetherill Park. This freestanding building measuring 1,208m2 on a secured site was ideal for the business to continue its growth strategy. The deal was negotiated by Sales & Leasing Negotiators James Zerefos and Dennis Manalili, on a four-year term with a commencing rental of $259,849.00 pa net reflecting $215.00 psm + outgoings & GST.
ISSUE 167 | MARCH 2024 | 02 9630 8000 Disclaimer Notice: Neither Bawdens, nor the publishers and editors of articles in this issue accept any form of liability, be it contractual, tortious or otherwise, for the contents of this newsletter or for any consequences arising from its use or any reliance placed upon it. All the information contained in this publication has been provided to us by various parties. We do not accept any responsibility to any person for it’s accuracy and do no more than pass it on. All interested parties should make and rely upon their own enquiries in order to determine whether or not this information is in fact accurate. Customised relevant marketing means maximum results. We are the only agency with real time database management. Instagram Facebook LinkedIn YouTube Simply search | PAGE 12 MARKET INSIGHT SPECIAL The Rise of Industrial Property Values Arndell Park October 2021 29 1.38 Auburn September 2022 10 1.00 Bankstown July 2022 23 1.91 Blacktown July 2022 23 1.91 Condell Park July 2022 23 1.96 Chipping Norton July 2022 19 1.58 Castle Hill August 2022 29 2.63 Dural January 2022 22 1.22 Glendenning July 2022 21 1.75 Greenacre July 2022 30 2.50 Guildford December 2022 16 2.67 Kings Park July 2022 26 2.16 Granville January 2022 30 1.66 North Parramatta September 2022 17 1.54 Lidcombe October 2022 22 2.45 Milperra July 2022 18 1.50 Minchinbury September 2021 24 1.09 Moorebank June 2022 19 1.46 Norwest June 2021 16 0.64 Padstow July 2022 30 2.30 Regents Park December 2022 13 1.62 Revesby May 2022 24 1.71 Riverstone May 2022 31 2.21 Rydalmere October 2022 22 2.44 Sefton December 2022 16 2.28 Seven Hills September 2022 15 1.50 Smithfield July 2022 22 1.83 Silverwater May 2022 24 1.71 Wetherill Park August 2022 16 1.45 Yennora November 2021 24 1.26 Suburb Survey Period Commencement Comparable Price Growth % Avg Monthly Growth% Bawdens recently released research for private clients summarising the growth in the value of offices and warehouses across 30 suburbs in Sydney. The survey tracked sales completed in each suburb over a certain period. The sales monitored in each suburb through the differing periods measure and compare the price per square metre of building area from the survey commencement until July 30, 2023. The suburb with the best performing monthly growth was Guildford closely followed by other suburbs south of Parramatta that included Padstow and Greenacre. The best-performing suburbs to the Northwest of Parramatta were Castle Hill and Riverstone, these locations both experienced consistent price growth. This is a result of the very few sales occurring due to supply constraints. Perhaps, not surprisingly, the lowest performing suburb was Norwest, with most properties in that location holding large office components that many users do not require today.
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