City of Sydney planning to rezone swathes of southern industrial areas

City of Sydney planning to rezone swathes of southern industrial areas
City of Sydney planning to rezone swathes of southern industrial areas

City of Sydney Council has put forward plans to rezone industrial areas in the city’s south to allow a wider range of commercial uses.

Although the areas are close to Sydney’s CBD and near suburbs that are in demand for residential development, private housing will generally not be allowed on the land.

Large areas zoned for general and light industrial purposes around Alexandria and Rosebery are earmarked to be rezoned as Business Park (see figures 3 and 4).

The only places in which residential development will be allowed are a section of Botany Road that currently permits shop-top housing and senior housing, and two areas on the edge of the Business Park that are being considered as sites where affordable housing could be developed to accommodate lower paid workers.

Attitudes towards land zoning have changed, Council notes in the introduction to its planning proposal. In the past, land use planning sought to divide uses into zones to minimise conflict between uses. Now, there is recognition that benefits could flow from locating a range of activities together, as long as they don’t have an "unreasonable impact" on one another – including raising values to such an extent that industry is priced out of the market by residential development.

The Council expects restricting the land in the areas proposed for rezoning to mainly commercial uses will keep land values down.

The conversion of other commercial and industrial sites in Sydney’s south to residential dwellings has started to have a major impact on the industrial market, and consequently jobs in the area.

Knight Frank’s research shows 71 businesses in the South Sydney commercial sector have been displaced in the past 12 months due to land rezoning with these businesses forced to consider relocating.

Knight Frank’s Industrial South Sydney Manager, Brooke Railton says Marrickville, in Sydney’s inner west is a popular alternative, given its close proximity to the Port Botany, Sydney Airport, main arterial roads and the CBD.

Fireplace manufacturer Jetmaster recently bought a vacant freestanding warehouse in Marrickville for $3.3 million, after selling two of its properties in redeveloped areas to enable the business to operate out of one location. Knight Frank received close to 80 enquiries on the industrial property. 

Industrial land values in Sydney's south are on average $850 per square metre, Colliers International’s first half Industrial Research & Forecast Report found. That compares with values of $250 per square metre in Sydney's south west and $330 per square metre in the western suburbs.

Residential property prices in suburbs near to the South Sydney employment lands are considerably higher.

In Erskineville, which borders Alexandria to the west, residential land values were around $520,000 for a 4x32 metre block in 2013, according to the NSW Valuer general. That equates to $4,062.50 a square metre.

In Mascot, adjacent to the southern end of the employment lands, residential land values rose by 10% between 2012 and 2013 to $665,000 for a 12 x 40 metre block, according to the NSW Valuer general. That equates to $1,385.40 per square metre.

CBRE recently negotiated the sale of a 947 square metre showroom/warehouse facility at 133-141 Botany Road in Waterloo with residential development potential to Advan Properties. The residential property developer intends to lodge a development application for the site’s redevelopment.

The sale price of $4.5 million represented a land rate of $4,751 per square metre, according to CBRE.

Another freestanding commercial property with residential conversion potential, located just south of the City of Sydney employment lands sold to technology solutions firm Crosspoint Telecom for $2.31 million.

CBRE noted in its Q4, 2013 Australian Industrial MarketView report that investors were highly active in Sydney’s industrial market and were prepared to sit patiently on inner-ring assets that might be rezoned for residential use in future.

“A new breed of buyers, comprising mainly of unlisted wholesale groups and syndicators, are targeting these typically smaller assets – priced sub $30 million – due to their close proximity to the city and future redevelopment potential for higher and better use,” CBRE senior director, industrial investments, Matthew Lee says. “These buyers are happy to wait it out on an asset in order to take advantage of retail or residential redevelopment opportunities down the track.”

Click through to the next page to see graphics of City of Sydney Council's rezoning plans.


Employment lands in the City of Sydney Council area comprise three precincts:

(a) the southern employment lands – this area is about 265 hectares in size and stretches from the southwest corner of the Green Square Town Centre to the south west corner of the LGA. Generally the area is in the suburbs of Rosebery and Alexandria and is bordered by Gardeners Road to the south, McEvoy Street on the west and Mentmore Avenue and Botany Road on the east;

(b) the Moore Park employment lands – this area is about 3.6 hectares in size and includes a single large lot on which the Moore Park Supa Centa is currently located; and

(c) the Parramatta Road employment lands – this area is about 2.1 hectares in size and includes several small lots in Glebe. The area is bordered by Arundel Street and Parramatta Road and divided by Ross Street.

Source: City of Sydney Council

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 City of Sydney planning to rezone swathes of southern industrial areas

Source: City of Sydney

 City of Sydney planning to rezone swathes of southern industrial areas

Source: City of Sydney

Existing City of Sydney Southern Employment Lands in context

City of Sydney planning to rezone swathes of southern industrial areas

Source: City of Sydney Council 

Zoe Fielding

Zoe Fielding

I am a freelance journalist and editor with more than 15 years experience specialising in personal finance, property, financial services and financial technology. A skilled writer and researcher, I have extensive experience producing high quality content for corporate and media clients. I am used to working to tight deadlines and tailoring the pieces I produce to suit a variety of audiences and formats.

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Sydney Industrial Zoning

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