ASX-listed property developer Stockland Corporation has won approval for the third and final phase of its 28ha Ingleburn logistics park in Sydney’s south-west.
The $58-million phase will add seven warehouses in three buildings across about 9.5ha to the masterplanned industrial estate, 50km from Sydney.
The development was greenlit by Campbelltown City Council last month and includes floorspace of about 49,000 square metres.
Stockland says work has already begun and is scheduled to finish in the third quarter of next year.
Stockland executive general manager for workplace and logistics Tony D’Addona said that with the third phase Stockland was accelerating its logistics pipeline in response to strong demand and low vacancy rates that were being driven by growing investment in onshore supply chains.
“Our logistics assets on the eastern seaboard alone amount to more than 1.2 million sq m of gross lettable area,” D’Addona said.
“And we recognise Sydney’s south-west as a critical market for logistics space where our established assets in Leppington, Ingleburn as well as Padstow and Warwick Farm have a combined book value of more than $590 million.”
Stockland’s approval comes at a critical time for the Australian industrial and logistics sector, which at 0.8 per cent boasts the lowest vacancy rate in the world.
In fact, commercial real estate services and investment giant CBRE said an additional 1.8 million sq m of space will be needed in Australia over the next five years to accommodate the forecast growth of online shopping.
CBRE’s latest e-commerce trend and trajectory report, which analyses the ongoing rise of the sector in Australia and its impact on commercial property, showed online sales rose from 9 per cent of total retail spending in 2019 to 14.3 per cent in July this year.
Fuelled by shifts in retail habits during Covid lockdowns, online sales are forecast to reach 17 per cent of all retail spending by 2026.
“E-commerce has grown significantly in the past five years, and that continued adoption requires large amounts of logistics space,” CBRE head of industrial and logistics research Sass J-Baleh said.
“In the case of Australia, the forecast growth equates to needing an additional 1.8 million sq m of space, amid what’s already a chronic shortage of supply and a relatively limited pipeline of new stock.
“It’s set to fuel rental growth over the coming years, as occupiers compete for supply, but more broadly there is a question of how to facilitate this growing requirement, including whether it’s possible to unlock alternative space or intensify the use of available space.”
In June this year, J-Baleh warned Australia would need at least twice as much industrial floor space as it was building if it was to keep up with growing demand.
For its part, Stockland says it has $1.2 billion worth of projects in active development across the country. Advanced discussions are under way with potential tenants for the Ingleburn space.
“Many of our customers are existing tenants, who are looking for the next generation of contemporary and sustainable logistics assets that can meet the needs of their growing businesses,” D’Addona said.
Ingleburn is one of 29 logistics properties Stockland counts across the country.
