NSW industrial properties see increased land values

Scarcity in industrial land in NSW, coupled with continuous demand has seen land values in certain areas soar over the past 12 months, according to Colliers International.

Colliers claim this may herald a new influx of strata purchases. 

The Valuer General’s report released in July 2018 backs up this statement, it reported that industrial land values in NSW grew on average by 17.5%.

Standout areas were Willoughby Council at 55.1%, followed by Cumberland at 53.9%, Blacktown at 33.1% and City of Parramatta at 32.2%. 

Kellie Tattersall, Director, Industrial at Colliers International says that while some of these increases have been brought upon from residential rezoning, the majority are not, which could ultimately influence investors decisions to buy a freehold industrial building or an industrial strata unit. 

"We are at an equalising point in time where the holding costs for a freehold industrial asset are nearly the same as an Industrial strata unit in the Inner and Central West industrial areas." 

“Traditionally, investors find freehold industrial assets more appealing for various reasons, including cost efficiencies, but we could see this trend change as land values increase.” 

“With minimal developable industrial land left in Sydney’s Inner and Central West areas, we may see an increasing demand for strata units over the coming years for a variety of reasons.” 

“This includes land tax, which is due to increase over the next couple years; the need to supply desirable amenities with a sense community to attract staff. Plus, the fact that strata units are easier to manage and maintain, with the aid of a body corporation, which is important to keep the property’s overall value,” she concluded.