In March 2017, Colliers Research undertook an investigation into Sydney’s industrial land supply. The paper provided the number of years of industrial land supply left as well as a projected amount of land when factoring in ‘potential future employment land areas’.
Comparing the last paper (which used 2016 data) to an updated paper just published (using 2017 data), it indicates there is a net increase of industrial-zoned land supply within the Sydney Metropolitan Region, however, a decrease in the total area of available land yet to be developed (i.e. undeveloped zoned land) – a decrease of around 113 hectares.
Between 2016 and 2017, there has been a net increase of 123 hectares of industrial zoned land – mainly due to rezonings. Over 200 hectares of industrial land was gained as a result of rezoning for industrial uses in 2016, including Moorebank (157ha), Mamre West in Penrith (47ha), and Cudgegong Road Station in Blacktown (28ha). Over the same period, just over 60 hectares of employment land was lost due to rezonings to alternate use – particularly within the North West, Central West, South, and North sub-markets.
According to the NSW Government Planning and Environment’s Employment Land Development Monitor, there is a greater concentration of industrial zoned land (developed and undeveloped) within the North West and South West sub-markets (representing a combined 59 per cent of the total Sydney Metropolitan Area). The North and Inner West sub-markets’ share of industrial zoned land is only 3 per cent and 4 per cent, respectively.
Although the South sub-market is regarded as one of the most constrained market with respect to land supply, the lack of supply is experienced within the ‘inner’ South area (i.e. encompassing areas such as Alexandria, Botany, Mascot, Banksmeadow, and Rosebery). There is extremely limited scope for development, with only 8.6 hectares of undeveloped land (all of which is unserviced). As of 2017, the Banksmeadow industrial precinct lost all its undeveloped serviced land supply.
The Sutherland Local Government Area (‘outer’ South region), on the other hand, holds around half of the South sub-market’s land supply (or 530ha) with large scope for industrial development (113ha of undeveloped land).
Between the period 2008 and 2016, the average annual take-up rate of industrial land was 157ha (lowest level equating to 105 hectares per annum and highest level recorded at 264 hectares per annum). Most of the land take-up was concentrated in the western sub-markets over the period.
Supply / demand gap
In order to determine the future demand for land, the average historic land take-up rate has been applied (i.e. 157ha per annum). This average will be considered the ‘base case’. A ‘high case’ and ‘low case’ of 264 ha and 105 ha per annum (based on the highest and lowest take-up recorded over 2008 to 2016) scenario has also been considered to deduce a range in the years of supply left.
Given that there is currently 663ha of undeveloped serviced land, and taking into account half of the undeveloped unserviced land (i.e. 1,076ha) equates to 1,739 ha of total land supply.
Note: Only half of the total undeveloped underserviced land has been added to the total supply calculations in order to take into account land required for roads, infrastructure requirements and environmental considerations, as well as possible future planning changes to alternate uses (such as residential, retail, commercial land uses).
In addition to undeveloped land, taking into account around 30 per cent of the total area set for future employment land release (i.e. 1,996ha) equates to 3,735 ha of total land supply.