Sydney Gentrification Pushing Industrial Developers West


The gentrification of Sydney is forcing industrial tenants west as developers struggle to meet demand for “employment land”.

Former warehouses are rapidly becoming mixed-use developments including the Emerald City build-to-rent project in Alexandria, office towers in Mascot West and the massive White Bay Power Station precinct.

Frasers Property Industrial is about to release 750ha of land near Penrith, however, it won't be enough to keep pace, according to general manager Ian Barter.

“There probably hasn’t been a land release in western Sydney since the Australian Wonderland theme park was converted into employment land some 20 years ago,” Barter said during The Urban Developer In Focus webinar.

“It [the Mamre Road precinct] is about four to five years of supply and the challenge is, even though the land got rezoned last year, we’re still working through the DCP [developmental control plans] and infrastructure is still being worked on, so it’s not hitting the market today.

“That’s probably the biggest frustration within the sector—we need to get that land online as quickly as possible.”

Aerial image of 850 hectares of dry yellow-green land to be used for industrial use near Penrith.
▲ Mamre Road precinct could provide about 5,200 construction jobs and 17,000 ongoing jobs when fully developed according to the NSW Government.

Barter said Sydney has been at a critical under-shortage for some time for employment land.

“You’ve got to think that with the gentrification of a lot of traditional industrial areas … in south Sydney and the inner west no longer have that capability so everyone has moved out into the western suburbs of Sydney, primarily Penrith and Blacktown.”

Placing further pressure on industrial land in Sydney is the Aerotropolis and the demand for data centres.

However, this also creating opportunities for developers, according to Penrith City Council director city futures Kylie Powell, who said they already had potential workers ready to move into this space.

“Our latest work in that space is indicating we need in the order of 100,000 jobs by 2041 to support both our current and growing population,” Powell also said during the webinar.

“We have more than half our working population leaving the area for employment every day and that’s just not good enough.”

There is a multi-billion-dollar development pipeline in city locations closest to the Aerotropolis.

This includes major civic and residential developments including Toga’s Penway Place, Cabe Development’s Panthers mixed-use precinct and Avenor assisting council with the 131 Henry Street development.

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