With Western Australia’s strong economy continuing to drive demand for industrial land, owner occupiers and investors are securing industrial land as fast as it is being supplied.
With Western Australia’s strong economy continuing to drive demand for industrial land, owner occupiers and investors are securing industrial land as fast as it is being supplied.
Real Estate Institute of Western Australia (REIWA) statistics show industrial sales are the biggest market sector for commercial property in WA, representing 34 per cent of all sales in the 2003/04 financial year.
State developer LandCorp is responsible for a substantial portion of the state’s industrial land supply .
Industrial assets make up 40 per cent of its balance sheet.
LandCorp has sold 57 hectares of industrial land during the 2004/2005 financial year – approximately $30 million in sales.
One of LandCorp’s mandates is to ensure an adequate supply of appropriate industrial land into the future. The company has a strategic land bank intended to cater for growth along transport corridors, growth areas and in regional areas for the next 20 years.
CEO Ross Holt said LandCorp released land to cater for demand and worked closely with the Department of Planning and Infrastructure and other agencies to plan industrial land around major infrastructure.
“We know there is a need for industrial land in the north east corridor but in terms of supply we don’t want to overdo it, and we don’t want to underdo it,” Mr Holt said.
“We can bring land on relatively quickly – if we know there is demand, we can have land in three to six months, and if there is a concern about running out of industrial land, we can diffuse it quickly.”
Mr Holt said the Institute for Research into International Competitiveness (IRIC) recently completed an economic impact study for LandCorp’s industrial Enterprise Park in Wangara and found the estimated total economic impact of Enterprise Park over a 40-year period to 2020 at more than $37 billion.
“The report states that the direct economic impact from indirect expenditure on the estate, including earthworks, provision of services, purchase of lots and development of business, is estimated at $17.5 billion, and the indirect impacts were found to contribute a further $19.7 billion,” he said.
“The power of industrial land development is incredible – if you look at that study and apply those results to industrial estates across the state, the results would be staggering.
“We are just the delivery agency of a platform for growth.”
The release of stage seven at Enterprise Park resulted in 19 lots sold within four weeks for $154 per square metre. It is expected stage 7a will be released mid 2005, with stage 8 in late 2005.
The recent acquisition by LandCorp of a further 40 hectares in the area is currently in the planning stage and, when combined with existing land holdings, will provide a further 205 lots to ensure supply over the next five years. “Enterprise Park has played a central role in ensuring an adequate supply of industrial land for Perth’s north west corridor in supporting job creation and economic development in Wanneroo,” Mr Holt said.
“People like having their businesses close to where they live, and we have to provide employment opportunities through industrial land, which allow people to live locally, work locally and have their businesses locally.”
LandCorp business manager John Hackett said the nature of industrial land meant considerable strategic planning was needed and that a lot of industrial estates sold over a 15- to 30-year period.
“Canning Vale sold over 31 years, Enterprise Park in Wangara had its first sales in 1981 and is expected to go until 2010 and we are anticipating Hope Valley Industrial estate will have 30-50 years worth of land,” Mr Hackett said.
“The key to supply is understanding environmental and planning approvals so that estates can come to the market as needed.
“There is a direct link between the expansion of the industrial market and mining expansion in WA – they feed straight into each other.”
In relation to increasing sale prices for industrial land, Mr Hackett said independent valuers were used to establish prices and that, as estates become more mature, markets reflected an increase in prices.
“There are a lot of owner occupiers driving the market – because of the reasonably poor performance of some super companies, some owner occupiers saw opportunities to buy and develop their own premises. People have a real affinity with bricks and mortar,” he said.
“LandCorp has secured well-located land in each of the city’s key growth corridors, and places like Cockburn Commercial Park and the 1400 hectare Hope Valley Wattleup Redevelopment Project will provide secure, adequately-buffered land for business and industry in Perth’s rapidly expanding south-west.”
LandCorp also catered for heavy industry, which made a major contribution to the state’s economy.
“At the Kwinana Industrial Park, where land is made available on a leasehold basis to industry of strategic importance, occupants generate direct sales of $4.34 billion, of which $1.58 billion is export sales,” Mr Hackett said.
