Hong Australia Corporation secured a Smithfield industrial facility for $23 million following strong growth in the food manufacturing sector.
Food manufacturing has outperformed the broader manufacturing sector in recent years, driving up rents and capital values.
Hong Australia, a Sydney-based food distributor, importer and exporter purchased the property from Propertylink.
Located at 150-156 McCredie Road, the site comprises a 20,236 square metre freestanding facility on a 4.733 hectare site.
CBRE’s Michael O’Neill, Elijah Shakir, and Jason Edge negotiated the sale, which reflected a strong return for Propertylink.
“Growth in food manufacturing and food distribution is one of the major niche markets driving rents and capital values,” CBRE’s Michael O’Neill said after negotiating the sale.
“Food users typically prefer purchasing given the large capital outlay and the need to amortise specialised fit-outs. From a leasing perspective, clients are increasingly willing to accommodate food users given they often commit to longer leases.”
Elijah Shakir, who assisted with the sale negotiation, said the sale highlighted strengthening activity in the owner-occupier market.
“This is the third time in as many months that we have seen an owner occupier purchase an asset [in the] $20-$25 million range in Western Sydney,” Shakir said.
CBRE Research revealed food manufacturing has outperformed the broader manufacturing sector in recent years, with employment growing at 3% annually over the two years ending June 2016 versus a 2% contraction for the overall sector.
On a value added basis, food manufacturing grew 4.2% annually compared to 1.5% for the overall manufacturing sector.
CBRE Associate Director of Research Bradley Speers said the food and beverage export industry continues to expand, with total food exports growing 6% annually over the past five years, while food imports grew 9% during the same period.
“Ongoing population growth will continue to support the sustained increase and further fuel demand drivers for suitable industrial sites," he said.
