Small lots in big demand
Expectations of continuing strength in the Western Australian economy have prompted an increase in the number of small businesses looking to develop their own properties, driving a demand boom for industrial lots.
Industry sources say the interest in this sector of the market is such that space in industrial parks in Wangara, Mandurah and Welshpool is all but gone.
The Swan Industrial Park in Canning Vale is one of the few places that small industrial lots are still available.
The Swan Industrial Park site mainly consists of blocks between 1,000 and 1,500 square metres in size, with some larger lots.
The 20-hectare industrial park was bought from the Swan Brewery, which used it as a nine-hole golf course, reticulated by excess water from the brewery. Eventually Swan decided it did not need the excess land and sold it.
Knight Frank industrial specialist John Hackworthy said there was “without question a boom in small industrial lots” as many small businesses would rather be owner-occupiers than tenants.
“There is not enough supply to meet demand.” he said. “The industrial land market is closely linked to the economy, which is extremely strong, and if small businesses are succeeding, it gives them the confidence to buy and develop their own properties.
“We recently sold out of industrial land in Mandurah and Wangarra, and I don’t know where you would find small lots right now apart from the industrial park in Canning Vale.
“In the future there will be some smaller industrial land becoming available in Bibra Lake, Wangarra and Malaga.”
Stage one of the Swan Industrial Park is sold out, and stage two will come on the market this week.
MLV Real Estate director David Lamb said he had originally expected stage two to come on to the market next year, but strong demand had brought the release date forward.
“We are mostly selling to owner-occupiers who have come from strata units,” he said.
“Stage one was released at the end of January at roughly $145 a square metre for a 1,000 square metre site. Prior to the stage two release that figure went to $150, and stage two is going at $155 with land closest to Baile Road getting $160 a square metre.”
An auction at LandCorp’s Orrong Estate in Welshpool on June 9 raised even higher prices, with a top price of $212/sq m for a 1,400sq m block with 34-metre frontage on Colin Jamieson Drive.
Developer for the industrial park in Canning Vale, Benchmark Properties director Paul Devbreux, said smaller companies were accumulating assets under self-managed super funds,which was helping drive demand.