NSW transportation infrastructure to boost industrial property: CBRE
Industrial property zones in Sydney, Newcastle, Wollongong and the Hunter region stand to benefit from infrastructure projects in NSW due to be completed over the next nine years, according to analysis by CBRE.
News of this boost to industrial property zones in NSW follows the state government’s decision to offer bonds to raise capital specifically for infrastructure projects.
Although transport accounts for 31% of Australia’s economy, NSW had only an 18% share of investment in transport infrastructure projects, especially those influential to industrial property between 2000 and 2010.
“Two things stand out in the transport infrastructure proposals on our list for New South Wales to 2020,” says CBRE executive director of global research and consulting Kevin Stanley.
“One is that an increasing share of investment will be going into rail or rail-related projects, as opposed to roads.
“The major project influencing this trend is an effort to carve out a dedicated rail freight line from the expanded Port Botany facility through the southern suburbs of Sydney, to link to new inland freight terminals at Enfield and Moorebank.”
The five key future projects identified by CBRE that are likely to influence industrial property are:
- Southern Sydney Freight Line (SSFL) – a proposal for a new 30 km rail in an existing 36km rail corridor between Macarthur and Sefton in the Southern suburbs of Sydney allowing passenger and freight services to operate independently. It is likely to stimulate the construction of warehousing in and around the new freight terminal facilities at Enfield and later, Moorebank, as well as cause a rise in industrial land values in and around these locations.
- Intermodal Logistics Centre - currently being constructed at Enfield, Sydney ,the terminal will consist of five warehouses totaling 55,000 sq m with a light industrial and commercial area consisting of 40,000 sq m. The terminal will be fully operational in late 2013.
- The Hunter Expressway – This is the largest road project currently underway in New South Wales, with a project cost of $1.7 billion. It will provide a more direct and efficient route for freight movements between the Upper Hunter and the Port of Newcastle and will stimulate the long-term industrial development potential of the Hunter Economic Zone at Kurri Kurri and more generally in Greater Newcastle.
- The Erskine Park Link Road –The $80m project will provide a 3.1 km four lane divided road between Lenore Lane, Penrith and Old Wallgrove Road, Blacktown. By providing high quality access between Erskine Park and Eastern Creek it will unlock hundreds of hectares of new employment lands for industrial development and use within the Western Sydney Employment Area.
- The Port Kembla Outer Harbour Development –now under construction, it will provide for future stages of port development over the next 25-30 years. Regional-based port expansions are now underway at Newcastle and Wollongong and in Geelong in Victoria. Regional port expansion can also assist in diversifying regional economies and providing a boost to downstream supply chain real estate facilities in non-metropolitan areas. Stage 1A of the Port Kembla project is due for completion in mid-2012.
Charles says the focus on rail or rail-related projects in Sydney will reinforce the importance of the prime industrial areas in the corridor which stretches from Port Botany west along the M5 Motorway, and picking up those areas in the South West and the Outer West regions along the M7 transport corridor.”
He says the other theme apparent in NSW is the amount of infrastructure funding dedicated to regions outside of Sydney.
“Newcastle is the major beneficiary here, which supports ongoing development of the coal industry in the Hunter Region and provides greater potential to downstream industrial property development to support this industry,” he says.
“The expansion of Port Kembla, already underway, will also act to relieve pressure on the Port of Botany over the long run as well as support the development of the industrial sector in the Wollongong region.”