Perth’s industrial land sector is starting to show similar traits to the CBD office market, with sales data over the first four months of 2012 showing a clear contraction in supply.
Jones Lang LaSalle head of industrial Ben Widdowson said the sale of three industrial properties in Canning Vale, Welshpool and Kewdale, for a total of $77 million, highlighted increasing investor appetite for well-located, flexible properties.
“The flagship and potentially most telling acquisition was the $61.5m transaction for a 50 per cent interest in the warehouse, distribution and office complex occupied by grocery wholesaler and distribution company Metcash in Canning Vale” Mr Widdowson said.
“The acquisition by ASX-listed Charter Hall, one of Australia's largest fully integrated property groups, reflects the increasing interest for large institutional grade assets in the Perth industrial market.”
The property, located at the corner of Bannister and Baile Roads, is leased to Metcash until 2023 with two five-year options, generating an annual rental of more than $10 million.
Jones Lang LaSalle manager industrial, Nick Goodridge, said the property sold at Kewdale, on the corner of Abernethy Road and Hazelhurst Street, was one of a small group of investment-grade assets that rarely come to market.
“As evidenced by our recent campaigns, these properties become hotly contested when they reach the market,” he said.
He said that the narrow supply pipeline for industrial facilities in Perth resulted from a combination of a number of trends the Perth market has been experiencing since the GFC.
“Perth’s industrial construction cycle and subsequent supply has been influenced by the limited availability of industrial land in Perth’s core submarkets, the continued strength of the owner occupier market driving land values above feasible industrial development rates and stringent tenant pre-commitment regimes imposed by financial institutions limiting speculative construction in the core markets,” Mr Goodridge said.