Wollongong to benefit from Sydney's industrial land shortage.



With news of the soaring median house price in Sydney dominating headlines on a daily basis, the lesser known struggle for property in the industrial space continues, a recent Colliers International report shows.

The Industrial Research and Forecast Report, released in March, warns that Sydney could run out of industrial land by 2023, presenting challenges on a number of fronts. Competition for space for new warehouses and logistics facilities is strong, and with the rezoning of inner suburban industrial land for new Sydney housing, a forecasted 500,000 square metres of warehousing will need to be re-located from the inner suburbs.

The trend has had a massive impact on prices, with a 25% price increase in the last 24 months. "Any large land parcels that are suitable for major industrial estates will be chased hard in 2017" said Malcom​ Tyson, Managing Director of Industrial at Colliers International.

With the search for industrial land a challenge in Sydney, many business owners are increasingly turning to alternative solutions. Tim Jones, Director of Commercial Sales at MMJ Real Estate in Wollongong, has seen Wollongong benefit from these changes. “Following the GFC, commercial property demand slowed and stayed fairly flat until around the past 2 years, where we have seen an increase in enquiries across all property classes – industrial, commercial and retail” he said. Having received an increase of enquiries over the past 12 months, and with prices in Sydney continuing to rise, he expects the trend to continue.

As part of these developments, MMJ recently oversaw the sale of a commercial property to Tony Derham of Civil Foundations Group, a civil engineering company based in Botany that will now be re-locating to Wollongong. Following a colleague’s suggestion to investigate Unanderra, Mr Derham found that the facilities were generally bigger and more efficient than those found in Sydney and came without residential restrictions meaning more productivity.

It’s not just the availability of land that is attracting business owners like Mr Derham to re-locate to Wollongong. Mr Jones receives regular positive feedback on the skills of the workforce and the lifestyle Wollongong offers. “It provides an attractive option for their workforce, many of whom live in the outer suburbs of Sydney. By moving to Wollongong they can enjoy similar, if not shorter commute times whilst being by the beach” he said. “The cost of living in Sydney and the pressures that creates is another element, with Wollongong representing good value and providing proximity to Sydney” he added.

Mark Grimson, Economic Development Manager at Wollongong City Council, has also noted the increased interest in Wollongong from businesses and investors alike. "The attractiveness of Wollongong as a business location has not gone unnoticed in recent years, particularly in the manufacturing space" he said. "Over the past 18 months in particular, we have received an increased number of enquiries from businesses based in Sydney that are looking to expand or re-locate and take advantage of our competitive strengths".

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