Industrial sales agents are tipping Bayswater and Bassandean as the next areas to attract major investment, as land and infrastructure within 15 kilometres of the city becomes increasingly scarce.
Industrial sales agents are tipping Bayswater and Bassandean as the next areas to attract major investment, as land and infrastructure within 15 kilometres of the city becomes increasingly scarce.
Burgess Rawson joint managing director Andrew McKerracher said the old industrial areas of Bassandean and Bayswater were well located next to Tonkin Highway and would experience strong growth in the coming years.
Mr McKerracher said Belmont was another location that had “changed face” recently, with strong sales and very few listings currently available.
“Belmont is now the place for clean industrials, office/warehouses and showrooms,” he told WA Business News. “Industrial sales to owner-occupiers are very strong because it’s cheaper in the long term for them to buy. They really are the driving force behind the market at the moment and are buying up a lot of vacant land while interest rates are low.”
Savills research manager Belinda Nowland said buyers were very confident and were purchasing industrial property with record low yields, representing very little profit from the purchase upon leasing.
In February, the company sold the 32,536 square metres Austin Engineering site with office and workshop in Chisholm Crescent Kewdale to a private syndicate for $8.35 million on a 15-year leaseback.
“The yield of 7.48 per cent is a record for Perth, and even when you equate it back to 8.5 per cent, when you factor in the excess land it’s still very low for industrial property,” she said.
Ms Nowland said the Kewdale area was overheated with prices for industrial buildings rising 20 per cent in less than six months.
Welshpool was also performing strongly, according to Ms Nowland, with the company selling an 8,513sq m site on Riversdale Road to a private syndicate for $3.35 million last December on a seven-year leaseback to WA Freightlines.
It was bought with a low yield of 8.5 per cent, reflecting a strong demand for the area and high confidence in the long-term investment potential.
Further out from the city, the Armadale Redevelopment Authority’s plan to turn 188 hectares of underused land at Forrestdale into a major business park is starting to pay off.
Opened up this year as a result of the Tonkin Highway extension, land at the Forrestdale Business Park is attracting some heavy bids, one reportedly of more than $31 million in a sale of two large lots to a SAS Global private syndicate.
Mr McKerracher said the Forrestdale Business Park had been well received because of its location close to Tonkin Highway, and this transaction reflected the investor’s confidence in the site.
“Buyers are looking for sites anywhere near the freeway, rail, ports, arterial routes and major infrastructure,” he said.
Jones Lang LaSalle industrial sales and leasing agent James Condon said most sales through major agents were conducted off-market.
He expects strong growth in the next few years as the mining and engineering industries look to expand their operations.
Bayswater and Bassendean were starting to spark buyer interest, Mr Condon said, as Bassendean was right beside Tonkin Highway, with an extension through to Bayswater within 12 to 18 months.
Ron Farris Real Estate principal Ron Farris said Bayswater was the most under-rated and undervalued industrial area in the city. “Bayswater is only eight kilometres from the city and has been overlooked for years, but that will definitely change soon,” he said.
