LOW vacancy levels for industrial land in south-west Sydney boost the case for Moorebank, a report from consultancy UBS says.

The report, Moorebank – long term dream or near term reality, involved a survey of 130 warehouse managers.

Key findings were:

  • future space requirements of major users is outstripping supply
  • 40% of customers prefer to re-locate or ‘build to suit’ (rather than expand)
  • The acceleration in automation spend is likely to provide improved tenure as occupiers become wedded to their location and;
  • 60% of respondents believe proximity to a port is a key factor in deciding on a warehouse location.

According to the report, the decision to re-locate is often delayed due to costs.

“While the results support tenants signing at Moorebank, some may wait until the site becomes operational in the December quarter of 2019,” the report stated.

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“Our analysis in this note suggests there is a cost advantage for customers that are co-located within Moorebank.”

The report included cost analysis for a full container movement from port to customer, with an estimated cost of $840 per TEU via rail to customer at Moorebank against $970 for road direct to customer.

More than 70% of containers are ‘staged’ through a transport depot potentially adding a further $150 to the cost of road transport.

According to UBS, there is reason to believe new tenants will sign up to Moorebank during the next 12 months.

“Demand for industrial land has increased and customers are more likely to opt for ‘build to suit’ warehouse models moving forward,” UBS stated.

“Available stock is currently 40% below its historical average and Industrial land in the South West of Sydney is at its tightest vacancy level on record.” UBS states that it “does and seeks to do business with companies covered in its research reports”.

Moorebank Intermodal Company is an Australian government entity established to facilitate the development of an intermodal terminal at Moorebank.

MIC has entered into agreements with Sydney Intermodal Terminal Alliance, a subsidiary of Qube Holdings, to develop and operate the terminal.

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