Demand for infill warehousing in Sydney's outer west is as brisk as the winter westerlies, with national retail and hardware giant, Mitre 10 leasing the last tenancy at Centennial's ~14,980sq m Central West Distribution Centre at St Marys, 10km east of Penrith.

Mitre 10 has signed a seven-year lease in a deal brokered by Colliers' Matthew Flynn covering ~4,114sq m. It will use the facility as a warehousing and distribution centre with the lease comprising a newly built high-clearance warehouse that adjoins an existing refurbished warehouse, occupied by Pegasus Media & Logistics, plus two levels of new offices, parking and container set down areas. 

A number of sustainable initiatives were also added including the installation of rooftop solar panels offering battery storage and grid feed-in options, rainwater harvesting and the inclusion of energy efficient fittings.  

Centennial's Executive Director Paul Ford said he was pleased with Central West Distribution Centre achieving full occupancy and by the quality of the tenancy-mix.

"A main factor in acquiring the site was its potential to be upgraded and expanded, creating two premium mid-size tenancies to capitalise on the area's low infill vacancy rates currently sitting at around 0.5 per cent."   

"This positive leasing result can also be attributed to the strength of the Greater Western Sydney industrial property market and particularly St Marys," Mr Ford said. "Highlighting the strength of the local market is the fact we've also achieved an uplift in the asset's value which has increased by ~50 per cent since we purchased the site just under two years ago." 

The national fund manager and developer acquired the Central West Distribution Centre (originally a Masters hardware centre) in late 2022 for $35.3m through an off-market deal.  

"In a very short time, we have achieved a significant increase in value for a relatively small outlay which speaks to our strategy recognising the strength of Sydney's outer western industrial market and its standing as an emerging growth area with a number of large-scale infrastructure projects currently underway or in the pipeline," Mr Ford said.

"Adding to this, St Marys has been identified by the state government as being a Strategic Centre within its Strategic Growth Area mapping, placing it front and centre of some of the nation's largest transport infrastructure projects including the Sydney Metro, linking Greater Western Sydney to the new airport and Pacific National's St Marys containerised rail freight hub running to Port Botany and just two kilometres from Centennial’s Distribution Centre."

Echoing Mr Ford's views was Colliers National Director Industrial & Leasing, Matthew Flynn who said Centennial's Central West Distribution Centre is a great asset, located in an area of Western Sydney that is poised for future growth.  

"Its position, with high exposure on Forrester Road and the property’s proximity to key growth areas of Western Sydney, makes this an ideal location to service greater Sydney and was a driver for Mitre 10 committing to a long-term lease," Mr Flynn said.

"Centennial has created an excellent, institutional grade mid-space asset which is evident by the quality of the tenants and their long lease commitments to this well located facility in a high growth corridor."

Mr Ford added there appeared to be no let-up in demand for quality mid-space industrial facilities along the eastern seaboard with Centennial's Victorian team recently securing four new tenants to three of its inner-ring Melbourne facilities, who had collectively leased over 21,700 sqm of space in just four weeks. 

"This spate of recent leasing deals including St Marys, demonstrates Centennial's strength in identifying and bringing to life once often overlooked and undervalued sites and turning them into sought-after industrial premises worthy of attracting high calibre tenants and favourable leasing outcomes." 

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