Owner-occupants are driving competition as (loan) repayments are on par with, or significantly less than, some rents tenants are paying across Western Sydney at the moment, said Marcel Elias LJ Hooker Commercial Silverwater. 

Competition for bricks and mortar isn't restricted to houses, with owner-occupiers smashing auction reserves for warehouses by millions throughout Western Sydney.

 LJ Hooker Commercial Silverwater rounded out three agency auctions in the last three weeks by selling a 2,290sqm warehouse on a 7334sqm site at Smithfield for $10.4m - easily eclipsing the $8.5m reserve.

 An owner-occupier in the construction sector beat out 15 others to secure the property and plans to move in once tenant BlueScope Steel Limited - which pays $23,734.28 per month - vacates on July 1 2022. Landlord Heinrich Pty Ltd had been the long-term owner of the property at 101 Woodpark Road.

 The result followed on from the agency’s auction of a Girraween industrial facility which sold earlier in the week under the hammer for $7.87m, well above the $5.1m reserve set by vendors, owner-occupants Nevco Engineering.

 Fourteen bidders – who started bidding at $4.5m - competed for the property, which included 2,150sqm of industrial improvements within a 3,776sqm site on a street corner at 95 Mandoon Road.

Agent Marcel Elias of LJ Hooker Commercial Silverwater said the activity at the auction underlined the competition for commercial assets.

“Owner-occupants are driving competition as (loan) repayments are on par with, or significantly less than, some rents tenants are paying across Western Sydney at the moment,” said Mr Elias.

“It was owner-occupiers that purchased both the Smithfield and Girraween facilities, adding to a string of other owner purchases we’ve facilitated in April.

“Earlier in the month we auctioned a 1000sqm warehouse on a Wetherill Park site that was just shy of 3000sqm that attracted a dozen bidders. The warehouse and small office sold for $5.1m which was $1.5m above the reserve.

“These premiums are rivalling the competition we’ve seen in the residential real estate market.”

In the wake of COVID-19, Mr Elias said agents were beginning to field enquiries for industrial and office assets from investors who typically focused on the residential market.

“Those enquiries are mainly for stock in the sub-$10m bracket and that’s because of the shortage of stock in residential and the impact that competition is having on yields (in residential),” said Mr Elias.

“Yields for industrial, for instance, in Western Sydney are very favourable, by comparison, ranging from 4-5% for lower-grade stock.”

To request sales analysis for the above 3 deals please email the selling agent Marcel Elias of LJ Hooker Commercial Silverwater via the below contact form.