Kmart on the distribution centre expansionary path

Kmart Australia has agreed terms on the single biggest industrial pre-lease in the Western Australian industrial market in nearly a decade. 

It has committed to a 41,700 square metre, circa $35 million, office and warehouse complex within the Jandakot City precinct at Jandakot Airport which will serve as the retailer’s major distribution centre for WA.

Kmart had taken a long term lease over the facility which includes one hectare of containerised hardstand, with a specially designed wind safety barrier, on the ten hectare site.

The rental was not disclosed for the facility which will be developed by Jandakot City Holdings.

Construction has an expected completion date of mid next year.

The Kmart deal is the second major pre-lease deal at Jandakot City in recent times following Reece Plumbing’s 15 year pre-commitment to a 25,000 square metre office and warehouse complex in December. 

The Kmart and Reece deals, the largest in WA’s industrial property market in nearly ten years, reflected a welcome declaration of confidence in the WA economy, Savills Australia divisional directors, James Condon and Darren Curry said.

Kmart will relocate from its current facility at Canning Vale.

The new facility further marks Kmart’s significant growth as it is now one of the most profitable retailers in Australia.

Since engaging Savills in 2009, it has opened a 76,000 square metre distribution centre at Truganina in Melbourne, a 50,000 square metre facility at Eastern Creek in Sydney, and a 51,000 square metre facility in Brisbane.