A highly competitive campaign led to over 10 first round bids for this coveted Revesby property.
A prime 10,416sqm development site in South West Sydney has sold to a private developer as demand for scarce industrial land puts upward pressure on prices.
The property at 21 Marigold Street in Revesby was sold by Trent Gallagher and Angus Urquhart of Colliers on behalf of LBP Developments Pty Ltd for $16.3 million.
In what was a highly competitive on-market expressions of interest campaign, there were 11 round one bids which resulted in a tender process for round two, where multiple signed contracts were received and the vendor choosing the best offer.
“The deal resets land values within the region and shows multi-level warehousing in the south west is on the horizon,” Mr Gallagher said. “This was a fantastic opportunity to secure one of the last remaining scalable industrial development sites within Revesby where land supply is greatly diminishing, providing strong prospects for capital and rental growth.”
The property is currently occupied by Mirotone Pty Ltd with the lease expiring in April 2022. The price achieved equates to $1,555 per sqm of land with a current passing yield of 2.45 per cent. As the site was purchased for development purposes, the current rent was of less concern.
“The land rate achieved surpasses all expectations in the inner south west market and truly reflects how difficult it is to find prime industrial sites in the wider Sydney region,” Mr Urquhart added.
With a low building coverage of just 38 per cent and a prominent 75m frontage to Marigold Street, the listing was an attractive prospect.
The record-breaking $802 million sale of a 13.8-hectare Mascot site negotiated through Colliers is expected to be the catalyst for a price boom in surrounding regions, spurred on largely by increased demand for multi-level warehousing and logistic facilities on the back of the shift to online shopping experienced throughout the pandemic.
In the 12 months to September 2021, the land values from 1 to 5 hectares in South West Sydney have risen 24.1 per cent, according to Director of Industrial Research for Colliers Luke Crawford. This was the highest annual growth rate since March 2019 and well above the 10-year average growth rate of 13.7 per cent per annum.
The research, from the Industrial Development Update for Western Sydney, also showed that the catalysts behind the recent growth in land values has been the diminishing availability of industrial zoned land and significant levels of yield compression.