Savvy Industrial Developers See Beyond ‘Big Shed’ Solutions

While Covid-19 has impacted most sectors of the Australian economy, none have proven more resilient than the industrial sector—and there are plenty of industrial development opportunities now on offer that lie far beyond old-fashioned “big shed” solutions, a leading consultant says. Andrew Hoyne, creative director and principal of Australian property marketing and Place Visioning agency Hoyne, says the time is right for non-traditional developers to “seize the day”. Hoyne spoke with Jacquie Byron—who edited his book series The Place Economy— about his optimism for the industrial sector, and ways developers can innovate, disrupt and develop new income streams, creating more resilience for the years ahead. Jacquie Byron: What makes you so optimistic for this sector? Andrew Hoyne: A lot of industries sustained major hits during Covid-19 but logistics, freight and warehousing were pillars during the pandemic’s peak. The sector was doing well beforehand and the new landscape provides more opportunity to be progressive and increase financial returns. Other shifts in our economy present further potential, including a focus on local manufacturing from government and private enterprise, plus unexpected influences such as more focus on vocational-related education and training, and even regional universities. We have a population wanting to minimise commutes and work closer to home, and employers wanting more strategic business locations. We should align tenant curation with local workforce availability—the needs, goals and sentiments of tenants, developers, government and community are converging and developers should respond. ▲ Rivermakers by BMI Group JB: What has to change in the industrial development sector? AH: Developers need to reach outwards, towards people and places around their sites, and to new technologies, industries and innovations—industrial sites should be assets that deliver benefits broadly, and which make locals proud. We all know the workforce is changing: the days of old-school “big shed” industrial parks with no amenity or public transport; of instant coffee and lukewarm Chiko Rolls, are over. At Hoyne we refer to “District 21s”, new industrial communities with the emphasis on community. Resourced for tenant health and wellbeing, they’re ecosystems of complementary businesses in well-connected locations, sometimes on the fringe, linked to local communities, public and private institutions. JB: What should industrial development avoid? AH: Great developments in any category have a few things going on at once, so single-use industrial sites seem outmoded. It’s time to stop limiting activity from 5am to 5pm, Monday to Friday, and to look carefully at infrastructure like roads. While large vehicles commonly need access, site plans can mitigate risk and increase safety for humans by incorporating access points and pathways to support healthy exercise and create dynamic atmospheres. Ideally, sites shouldn’t be fenced off from the outside world, creating an us-and-them position locally: if they are situated beside riparian or green zones, for example, developers should exploit this for amazing outdoor amenity for precinct workers. JB: How can developers profit most from these developments? AH: Determine pockets of dead space and innovate with appropriate, alternative uses—not necessarily for leasing. Consider great spaces or community magnets and watch as existing and prospective tenants respond—and pay more. Don’t be a threatening cluster of sheds and trucks surrounded by barbed wire. Be a compelling, welcoming, business-based precinct that attracts a broad audience. Reconsider the traditional “big shed” leasing approach. If you can pay for it, you can have it. Target and curate for a specific sector, then design more allied amenity and experiences. Introduce other categories like entertainment: take a look at Willie the Boatman at Precinct 75 in St Peters, New South Wales—this brewery is both drawcard and common amenity for P75’s tenants and locals alike. If a site offers leeway regarding noise restrictions or access to large spaces, think about weekend markets, food trucks and events that turn an industrial park into a well-known, valuable destination. Consider the Grounds of Alexandria in Sydney: what was once an industrial precinct is now one of Australia’s most Instagrammed places. Nearby industrial precincts and residential developments all benefit, something we’d love more councils to recognise and value in zoning applications. Of course, these ideas don’t suit every industrial development—some are in isolated locations, some use every inch for big sheds—but more often than not, there are unrealised opportunities. ▲ Nexus Industrial - Dandenong South by Salta JB: Top tips for developers of products and places like this? AH: Analyse the area. See the additional opportunities that exist—whether big ticket items or simply fine-grain. Consider whether you want to leave money on the table by closing your site off during evenings and weekends: imagine your city’s most popular weekend playground occupied an unused corner of your site, then see how a curated group of food and beverage operators, working seven days a week, would attract weekday tenants. Think about rooftops—often a massive layer of passive wasted space—and how they could accommodate new experiences for on-site employees. For the really innovative, a whole new revenue source opens up! Consider how much value innovations like these add in terms of media attention and attracting leasing deals, not to mention the overall valuation of the site. JB: Why should non-traditional developers get on board? AH: It’s time to think differently about industrial scale, height, and in some cases integrated uses including commercial, entertainment, F&amp;B and retail—it’s time to locate more workplaces closer to more homes and offer more diverse opportunities. We must cultivate local business talent and create products and services to sell globally. As a key to Australia’s social and economic development, we need enterprise districts with links to educational and training institutions: think Cosmetic Valley outside Paris—a “competitiveness cluster” now responsible for producing one out of 10 of the world’s cosmetics. We should embed better recreational and entertainment assets in outer or newer suburbs. Hoyne has been working with several developers using our Traderhood™ model of industrial neighbourhoods characterised by commerce. For BMI Group in Brisbane, we created Rivermakers, and its masterplan now includes a trade centre, commercial spaces and heritage precinct, along with contemporary F&amp;B amid vibrant indoor and outdoor spaces. Thanks to revised planning, Rivermakers has successfully attracted a brewery and coffee roaster as anchor tenants, it’s great for local residents—but watch as large industrial and commercial tenants also follow that tempting aroma! The Urban Developer is proud to partner with Hoyne to deliver this article to you. In doing so, we can continue to publish our free daily news, information, insights and opinion to you, our valued readers.

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