WA’s emergence as an investment destination for lithium processing has been identified as one of the factors likely to amplify a shortage of big industrial properties in Kwinana, where demand for sites with an area of 10,000sqm is exceeding supply.
According to Colliers International’s Justin Mabarrack, the recent influx of buying interest was coming from recycling operators, engineering firms, industrial land developers, the transport and logistic sector and agricultural and building businesses.
“We believe the demand for industrial properties is being driven in part by companies with plans to service the lithium industry and are working on several buyer enquiries but are finding there is a lack of stock for sale,” Mr Mabarrack said.
“Tianqi Lithium Australia is in the final stage of building a lithium hydroxide processing plant in Kwinana and Kidman Resources announced in October that it had completed a pre-feasibility study for a proposed lithium refinery in Kwinana.”
Global demand for lithium hydroxide, a key ingredient in lithium rechargeable batteries, which are used in electric vehicles, home energy storage and other consumer products, is growing rapidly.
Mr Mabarrack said the relatively small pool of privately-owned industrial sites in Kwinana and strong demand to be close to other industrial businesses in the general industrial land market, was also contributing to the shortage.
“The Kwinana Industrial Area is one of the central estates in WA’s Western Trade Coast, an integrated industrial area servicing oil and gas, resources and agricultural sectors that are major drivers of the WA economy,” he said.
Colliers International’s two sales in Kwinana in 2018 were big industrial sites.
In an off-market transaction in September, Mr Mabarrack sold the 11,000sqm industrial property at 1 Yeates Road, Kwinana Beach for $3.85 million. The property has a six-crane 2400sqm warehouse and was purchased by an owner occupier who plans to use the property for engineering and fabrication.
Earlier in the year, the 2.62ha industrial property at 1 Butcher Street in Kwinana Beach attracted multiple offers before it was purchased for $4.5 million by South West developer J&P Group. The property has a 5000sqm warehouse and development potential.
Mr Mabarrack said lithium processing required input from a number of suppliers, including fabrication and engineering and chemical inputs, who need to be located close to the processing facilities.
“There is also a growing awareness that WA is in a unique position to capture additional downstream processing from the lithium industry, which would give Kwinana and the Western Trade Coast the opportunity to transform into a significantly bigger industrial base,” he said.
WA now has seven lithium mines and the town of Greenbushes in WA’s South West is home to the highest-grade lithium deposit in the world. In the most recent announcement, Albemarle Corporation received environmental approval for a lithium processing plant at Kemerton Industrial Park near Bunbury.