NSW Getting Serious About Infrastructure With WestConnex

The next major road infrastructure project in New South Wales (NSW),

WestConnex, will move ahead as funding from State and Federal governments has been set aside in recent Budgets.

WestConnex is a 33 km stretch of new and upgraded roads that is proposed to connect the major arterial M4 and M5 motorways via a loop that passes close to Sydney Airport and Port Botany in the South Sydney industrial precinct.

Upon its completion it will be the final piece linking the M4 ‘spine’ to the rest of the Sydney orbital network.

WestConnex proposed transport route

Source: WestConnex Stage 1 Factsheet, September 2013, RMS NSW

In the 2014-15 NSW Budget handed down on 17 June 2014, Treasurer Andrew Constance outlined the NSW infrastructure build “exceeding $61 billion” over four years. The focus of this year’s budget is on major road and rail infrastructure spending that will reduce freight pinch points and enhance productivity.

WestConnex is the key plank in the program that will directly benefit the industrial real estate sector.

However, further projects that are being funded include NorthConnex, a 9 km twin motorway tunnel linking the M1 Pacific Motorway at Wahroonga to the Hills M2 Motorway at West Pennant Hills; $3.5 billion over ten years for major road upgrades and new roads in western Sydney to support the development of an airport at Badgerys Creek; and ongoing funding of improvements to major interstate roads including the Pacific Highway north to Queensland and the Princes Highway south of Sydney.

Stage 1 of the WestConnex project proposes to widen the M4 motorway from two lanes each direction to four, easing congestion along the main arterial motorway linking Sydney’s Outer Central Western industrial precinct through to the Inner West.

Stage 2 and Stage 3 will link the upgraded M4 motorway via tunnels to the Airport and Port Botany precinct in South Sydney and ultimately through to the M5 motorway to Sydney’s expansive Outer South West precinct.

Between 2008 and 2013, more than 56% of Sydney’s major warehouse and distribution centre developments have been located in the Outer Central West. The Outer South West has accounted for 18% of new construction, so between them these two precincts are accommodating approximately 75% of users of new space in Sydney. These users will directly benefit from reduced transport time and costs from the WestConnex and related western Sydney road upgrades.

The significant expansion of Port Botany has just been completed and NSW Ports projects that strong container trade growth will continue over the next five years, with volumes expected to reach nearly 2.9 million TEUs in the 2018 financial year.

While the routing of the connections to the Airport and Port are yet to be finalised, there is already a clear need for road infrastructure upgrades such as WestConnex to ensure the transport infrastructure in Sydney keeps pace with the growth of the industrial property infrastructure of western Sydney, ensuring occupiers, owners and developers in the industrial real estate sector can continue to invest with certainty.

Nicholas Crothers is the Director of Industrial Research for JLL in Australia, based in Sydney.