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Western Sydney Airport at Badgerys Creek

By Emily Quick


By 2036 it is anticipated that the population of Western Sydney will grow to 1.1 million people and by 2056 that figure should increase to well over 1.5 million (NSW Department of Planning). Western Sydney is Australia’s third largest economy, expected to account for two-thirds of Sydney’s forecasted population growth.

All levels of government have been involved in the process of fostering infrastructure and development within this region to provide for the growing population. As a result, the Western Sydney Airport and surrounding Aerotropolis is the largest planning and investment partnership in Australia’s history.

The vision for Western Sydney is to evolve as a polycentric city which provides an integrated network across the Aerotropolis, Liverpool, Greater Penrith and Campbelltown-Macarthur, creating ‘30-minute cities’ from jobs, homes and infrastructure. Western Sydney Airport is the catalyst for growth, with the site being earmarked and initially acquired for such a purpose since the 1980’s. Construction on the airport site itself commenced in September 2018, with Stage 1 of the airport set to be operational by 2026.

The Western Sydney Aerotropolis has been the focus of recent planning, with an area spanning 11,200 hectares. The Aerotropolis consists of nine precincts, including Aerotropolis Core, North Luddenham, Northern Gateway, Mamre Road, Kemps Creek, Badgerys Creek, South Creek, Rossmore and an Agriculture and Agribusiness precinct.

In August 2018, the NSW Government released ‘Western Sydney Aerotropolis – Land Use and Infrastructure Implementation Plan (LUIPP). Stage 1, which highlights three precincts as ‘priority precincts’, being the immediate focus of planning. These include the Aerotropolis Core, South Creek and the Northern Gateway.

The LUIPP identifies that the South Creek precinct will act as a corridor for open space and water management. The Northern Gateway will focus on education, technology and research capitalising on the existing university lands and the Luddenham Science Park currently under construction, while the Aerotropolis Core will provide a commercial hub being one of the major hubs within Western Sydney. The Aerotropolis Core will also have a focus on defence and aerospace industries.

The wider region has been the subject of significant speculation regarding land uses and development potential for some time and as a result capital values have increased substantially. Colliers International notes smaller holdings (around 2-5 hectares) are regularly traded within the market. However, limited transparency ‘on market’ transactions are causing uncertainty on the level of demand and likely pricing for larger holdings (circa 10 hectares and above) within the region.

Larger holdings are tightly held and seldom transferred. We anticipate that purchasers are more willing to take a calculated risk on a smaller site given the value threshold. We consider the lack of transactions for larger sites to be the result of both unwilling sellers and unwilling buyers. Existing landowners are acting as land-bankers in an attempt to capitalise on future rezoning and as a result are reluctant to sell, creating a ‘bottleneck’ in the market. Conversely, potential purchasers are reluctant to fully commit to sites yet to be rezoned given uncertainty regarding timelines and permissible uses. Instead, many sites have since been transacting in ‘off market’ deals, directly between the developer and vendor, most notably under lengthy Put and/or Call arrangements. Option agreements commonly favour the developer, should the re-zoning not proceed.

The intention is that the LUIIP will be formally gazetted into planning by the end of 2019. As a result, market conditions within the priority precincts have tightened dramatically, until such time zoning occurs. We predict that when this occurs market activity will spike acutely. We consider the demand for zoned sites within proximity to the airport site and emerging infrastructure will increase land values in the short term and result in an influx of development.


For more information on the impacts of infrastructure development or Western Sydney Airport at Badgerys Creek please contact one of our infrastructure experts today.

 

 

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