Walker Corporation launches Vicinity Industrial Base, Adelaide second stage

Walker Corporation launches Vicinity Industrial Base, Adelaide second stage
Jonathan ChancellorDecember 7, 2020

Walker Corporation has launched the second stage of its Vicinity Industrial Base in Adelaide given the first stage of the 100 hectare estate has almost sold out.

Cahill Transport, Nick Scali Furniture, Rand, Toll NQX, and Kimberly-Clark have taken space at the Direk estate since its initial 2008 launch.

Vicinity ranks as Adelaide’s most successful industrial subdivision in recent years. It will eventually have about 4000 workers.

 

 

 

However, Colliers International’s latest industrial report Investors Tighten Their Grip suggests the pending Holden’s Elizabeth plant closure would put pressure on Adelaide’s industrial market.

"The announcement of the Holden plants closure has come as a blow to certain parts of to the South Australian industrial market.

"Holden and suppliers to the Holden plant account for a significant amount of employment, economic activity and occupiers in the Adelaide Outer North industrial market.

"Although this is likely to have a significant impact on the Outer North, other significant industrial markets in the West, Inner North and South are unlikely to see significant falls in occupancy.

"Also the full effects of this closure are likely to be staggered as the plant will not cease production until 2017.

"This allows for some time for the South Australian economy to readjust and absorb some of the workforce left from the Holden closure.

"Increases in vacancy in the Outer North are likely to be most acute from 2017 onwards," the Colliers report suggested.

Overall Colliers considers demand for industrial space appears to have improved over the last six months with the level of enquiry and size of requirements improving over this time.

Logistics and transport have been the key tenant type which has driven demand over the last 12 months, supported in part to the significant increases in online retail. 

Tenants looking for prime quality industrial space over 5,000m2 have very limited choices in the Adelaide industrial market with the vacancy rate tightening in the Adelaide industrial market to 4.2%, compared to 4.4% in the second half of 2013.

Overall rentals have eased slightly over the last 12 months with a rental range of $78 per square metre in the Outer South to $143 per square metre in the Inner West.

"Incentives across the market have remained stable with prime incentives currently quoted between 10-15%.

"The outlook for the Adelaide industrial market will be challenging in the Outer North and possibly Inner North in the medium term.

"This is due to the structural change from the automotive industry to another use, which will take time. "For the other industrial regions the outlook is more positive, with demand and enquiry likely to pick up and the lack of A grade space is likely to drive more new construction to meet demand over the next 12 months to two years."

It was in 2008 when Walker Corporation announced it was partnering with prominent South Australian developers Daycorp and Badge on the industrial estate in Adelaide's northern suburbs after the investment by government in transport infrastructure in the region.

The land was being offered from $85 per square metre in 2008.

Some $88 million of Adelaide industrial property transacted during 2013, around 42% below the transactions in 2012.

The largest sale in the year was the new Rand facility which sold in August for $32.3 million by the developer, Pacific Group to Cromwell Property Trust.

Rand Refrigerated Logistics is a 10,500 square metre food distribution centre at the corner of Heaslip and Edinburgh roads. 

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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