Industrial growth in south

Bibra Lake, Jandakot and Kwinana are expected to be among the strongest performing surburbs in Perth’s industrial land market over the long term, boosted by new infrastructure projects and improved transport routes, according to a report from Jones Lang LaSalle.

The group’s industrial white paper points to Perth’s outer south precinct – which also contains Forrestdale and Hope Valley/Wattleup – as the strongest prospect for future growth in industrial land supply.

This expectation is based on several major infrastructure projects being progressed by the state government, including the proposed outer harbour in Cockburn Sound.

A new intermodal rail system in the area would also improve the freight network and attract industry.

In this southern region, the biggest contributors to industrial land supply will be LandCorp’s 1,400-hectare Latitude 32 project, and a further 1,500ha of land in Hope Valley/Wattelup, of which LandCorp owns about 8 per cent.

Jones Lang LaSalle associate director industrial services, Rocco Demaio, whose agency is managing the Latitude 32 release, said demand in the outer south region would be driven by growth in industry around Kwinana and Cockburn.

“We believe that with the existing road network and surrounding industry, (the area) is a stronger prospect in the longer term, and it’s closer to being serviced and developed than other areas,” he said.

According to the report, Perth’s outer north precinct – including Neerabup, Wangara and Malaga – is expected to become a hub for transport and logistics companies, once road expansions in the area are completed.

Figures show the transport and logistics sector overtook the manufacturing sector in demand for industrial land in 2000, making up most of the demand for lots of 3,000 square metres and larger.

This growing demand for large warehouses, distribution centres and sites over 1ha is expected to continue.

Meanwhile, the trend of storage and distribution users to move to inner suburbs in the south – such as O’Connor, Canning Vale and Myaree – is expected to continue.

However, shortage of land remains an issue, despite an expected boost to supply later this year.

The WA Planning Commission estimates that demand for industrial space in WA ranges from 50ha to 130ha per annum, depending on market conditions.

In 2007, just 11ha (110, 870sqm) of new industrial stock was completed.

That figure is expected to triple this year, to 334,187sqm, although about 85 per cent of new supply is already pre-committed.

The boost to stock in 2008 is also partly due to delayed completion from last year.

In the longer term, the state government’s industrial land planning strategy, which is currently being developed, will facilitate land banking and relieve demand in some areas.

Green and sustainable development policies are also expected to influence industrial projects in future, with the Green Building Commission of Australia due to launch its pilot tool for industrial land next year.

Industrial rents are expected to continue to increase in 2008, having grown faster in Perth than any other major city over the past year.

Average rents are highest in the eastern suburbs, although emerging areas, such as Wangara, have posted strong growth in the past year (from $145sqm to $435sqm).

In traditional industrial precincts, such as Osborne Park and Herdsman, land values rose about 50 per cent a year between 2004 and 2007, from $385/sqm to $1,300/sqm.