“Solid” leasing interest for high quality industrial property: Dexus

Solid interest remains to lease high quality industrial facilities aligned to major road networks and port infrastructure, says Dexus head of office and industrial, Kevin George.

The assessment of industrial leasing demand was made as the property group released an update on recent leasing activity within the $2.5 billion Dexus-managed industrial portfolio.

“Our leasing activity in recent months has been focused on established markets with existing and new tenants.

“While Australian industrial leasing markets appear to have paused in terms of the strength in demand, solid interest remains for high quality facilities aligned to major road networks and port infrastructure,” says George.

Key recent leasing achievements include a 10 year lease over 10,605 square metres Garigal Road, Belrose, commencing 1 January 2014, considered a "significant result considering the difficult conditions in the Sydney north shore industrial market".

Other recent deals include:

• At Knoxfield Industrial Estate terms were agreed with Toll Transport to extend its lease over 36,123 square metres until July 2015
• At Axxess Corporate Park, Melbourne Australian Postal Corporation exercised its option for a fiveyear extension over 4,354 square metres commencing September 2013. This resulted in a total of 9,911 square metres being leased at this property across 13 transactions over the three months to 30 June 2013
• At 10-16 South Street, Rydalmere lease terms were agreed with two tenants totalling 8,360 square metres, including Payless Shoes occupying 5,294 square metres for 10 years, Deluxe Wood occupying 1,498 square metres for 4.4 years and Renz Australia occupying 1,568 square metres for four years. This leasing activity results in the occupancy for this property increasing to 93.1% and a WALE improving to 4.1 years
• At Quarry at Greystanes Wilson and Bradley signed a five-year lease over 3,976 square metres at 3 Basalt Road and leveraging on DEXUS’s long-term relationship with the Wesfarmers Group, Bunnings was secured for a one year term over 12,490 square metres at 2-6 Basalt Road. This leasing activity has resulted in 100% occupancy across all competed developments at Quarry at Greystanes, which comprises over 113,000 square metres
• At 12 Frederick Street, St Leonards two existing tenants have renewed their leases. Australian Postal Corporation at Unit 9 has extended its term by three years over 1,914 square metres and Metal Manufacturers at Unit C has extended its term for five years across 1,304 square metres

“Industrial tenant demand has been driven mainly by logistic providers benefiting from companies outsourcing their supply chains, as well as major retailers as they continue to consolidate their multiple warehouses," says Mark Cuddy, regional general manager of office and industrial.

“The recent leasing achievements demonstrate our capabilities to actively manage the industrial portfolio, build on existing tenant relationships and improve occupancy.”