Strong demand for residential property is sparking a buying frenzy from developers in south Sydney’s industrial area.
Manager at CBRE Michael Binskin said there was a lot of movement in the south Sydney industrial market at present.
“As a result of redevelopments underway across south Sydney, the current supply is decreasing, which is driving up competition in the market, particularly for medium-sized assets,” Mr Binskin said.
Over the past nine months, more than 40,000 square metres of medium-sized industrial assets have been leased across south Sydney, with an additional 21,000 square metres in negotiations to be leased by the commercial real estate company.
Mr Binskin said the sale of a substantial industrial property in Mascot earlier this year further demonstrated the strong demand currently being seen for residential conversions.
“The tenants that occupy the property’s current 10 warehouse units will be forced to relocate due to redevelopment of the site, which will see it yield more than 400 apartments,” Mr Binskin said.
Managing director of CBRE Nathan Egan said there was also strong purchase enquiry from owner occupiers.
“It is no longer a tenant's market, with stronger rates being achieved for owners and incentives being clawed back,” Mr Egan said.
“Despite increased buyer demand for industrial assets in south Sydney, the availability of assets in this mid-range is scarce.”