A substantial industrial holding in Botany has sold to Coombes Property Group for $25.25 million in a highly significant deal underscoring the strength of the southern Sydney industrial market.

The 7,435sqm site at 2-4 Hale Street sold at a rate of $3,396 per sqm.

Coombes Property Group is a private organisation that owns, develops and actively manages a diversified property portfolio. Coombes intends to improve the property and remain a long-term holder of the asset.

Colliers Industrial Director Tom Barnier and Industrial Executive Jeremy Green sold the property, which comes with rare IN1 General Industrial zoning, significant frontage to Hale Street and immediate access to Foreshore Drive and the M5 Motorway.

“The buyer has historically focussed on acquiring commercial property and this transaction is their first substantial industrial purchase in South Sydney. This signifies the strength of the industrial property market and the buyer’s vision to capitalise on one of the most rapidly growing and highly coveted asset classes in the wake of the pandemic,” Mr Barnier said.

“Coombes Property Group has a vision to add value to this site over time, based on there being an extreme lack of industrial land, coupled with record low vacancy levels.”

“This is a landmark sale and the price achieved is substantiated by the fact that 2-4 Hale Street is one of the last remaining large-scale development sites remaining in Botany, further adding to the significance of this transaction and highlighting the demand for prime land in South Sydney,” Mr Green added.

The sale of the property, which has 11 leases in total, comes on the back of record low vacancy rates and a severe shortage of stock, particularly in Botany, Mascot and Alexandria. The Sydney industrial vacancy rate now stands at 1.5 per cent while there are many individual precincts well below this level.

“Primarily due to the limited prime assets on the market, we have begun to see that the capital seeking industrial and commercial property has started to shift towards securing development land for investors, aiming to create their own purpose-built assets,” Mr Green said.

“This is exactly what we have seen in this deal and will continue to see in South Sydney as there is still so much unplaced capital to be invested.”

Commenting on the purchase, Coombes Property Group CEO Michael Coombes said: “We’re delighted to have secured this asset in what we see as a prime location in an extremely attractive segment of the market.”

Further aiding recent price growth, particularly for land, is the lack of vacant sites left for development in South Sydney. At the same time, the withdrawal and rezoning of industrial land for alternative uses has placed substantial pressure on the area’s remaining industrial land stocks.

Colliers Research estimates show that there is only 27.2 hectares of vacant industrial zoned land within South Sydney, while over 120 hectares of former industrial land have been rezoned for other land uses since 2012.

Colliers also recently transacted 3 Burrows Road South in St Peters for $11.55 million, as another prominent site with strong future industrial development upside, further showcasing the current strength of the market. The 3,617sqm site sold at a yield of 3.2 per cent. 

To request a sales analysis please contact the selling agents Colliers Industrial Director Tom Barnier and Industrial Executive Jeremy Green via the below contact details.