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News release

Sydney

Investors attracted by intermodal terminals

According to the Department of Finance and Deregulation, 90% of containers to and from Port Botany originate in or are directed to Greater Western Sydney.


SYDNEY, 21 July 2011 – With container traffic increasing and the Federal and New South Wales Government's looking to expand Sydney's network of intermodal terminals, investors in the industrial sector are becoming increasingly attracted to properties near inland ports.

Kingsmede, a private property investment company, has purchased a premium grade industrial site near the Yennora intermodal facility for $38.2m, its second major acquisition in the past few months.

The property, which is leased by Schenker Australia until 2016, offers a lettable area of 33,198 square metres and a site area of 7.39ha and has the potential for the expansion of a further 8,000 square metres.

Michael Wall, the General Manager of Kingsmede said that the high quality of the property and its close proximity to the Yennora intermodal terminal were key considerations when acquiring the site.

"With Kingsmede's long-term approach to property investment, we are always looking for quality, well positioned buildings in which we see strong long-term growth potential. This warehouse facility is extremely well designed and constructed to accommodate various users whilst being in close proximity to rail and road infrastructure. We are therefore delighted to have acquired this asset."

"The close proximity to the Yennora intermodal freight terminal was certainly a consideration for us as we see rail being the economical solution for major logistic users on the back of the expansion of Port Botany and increased container volumes," Mr Wall said.

The property features modern logistic-styled buildings and functional distribution facilities. It is also connected to key rail and road infrastructure offering proximity to major retail centres in Sydney's CBD, Parramatta, Hurstville, Burwood, Chatswood and the Hills District.

The sale was transacted by Michael Fenton and John Macree from Jones Lang LaSalle after an on-market expressions of interest campaign.

Mr Fenton, Head of Industrial, Australia at Jones Lang LaSalle said the sale reflects the depth of the buyer market for well located and leased product.

"Location is always key when you are looking at the industrial property market particularly when transport costs are increasing."

"This property is centrally located close to Fairfield and the Parramatta CBD. The proximity to key rail and road infrastructure is ideal for the current tenants particularly as container traffic in Sydney is growing."

"Import volumes rose 6.8% year-on-year in Q1 and it is expected that imports will remain solid over the next 12 months so logistical considerations are front of mind for investors and tenants alike particularly in Greater Western Sydney which has a high volume of container traffic." Mr Fenton said.

According to the Department of Finance and Deregulation, 90% of containers to and from Port Botany originate in or are directed to Greater Western Sydney.

Sydney Ports data shows that container trade in Port Botany grew by 6.1% in May 2011 compared with May 2010.

John Macree, Head of Sales and Investments, NSW said, "We expect that locations near intermodal terminals will become even more popular with investors as imports continue to increase and road transport costs rise."

A new intermodal logistics centre is currently under construction in Enfield in Sydney's Inner-West.