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Infrastructure investment and increased demand are laying the groundwork for significant industrial growth in regional NSW over the next five to 10 years.
According to property valuation and consulting firm M3, the areas slated for new development include Newcastle/Hunter Valley, Tamworth/New England and the Central Coast, as a confluence of factors support booming infrastructure needs across the state.
Demand is being driven by population growth and rising local delivery requirements in major regional hubs. A dearth of development land in Sydney, rising rents and road network congestion in the capital will also drive business to the nearby regions, while an increase in infrastructure investment in these locations is supporting the ease of development.
M3’s NSW industrial property director, Joel Ducey, commented that the regional hotspots are proving attractive due to their relative affordability, existing and proposed key infrastructure, connectivity, population growth and access to increasingly large residential catchments, with interest expected to grow over the long term.
Wollongong/South Coast region and townships such as Orange and Bathurst are also tipped to experience an upswing.
“The evolving nature of click-and-collect strategies is driving demand for businesses to be located within proximity of key delivery hubs, and to establish bases in these major regional markets,” Mr Ducey commented.
He warned, however, that shorter-term performance could be somewhat uneven due to the current economic headwinds.
M3 projects that the overall take-up of industrial space will be revealed to have reduced in 2023 compared to 2022, once the final quarter’s figures are released. This is due to a reduction in consumer spending on retail goods as well as tight vacancy rates making space hard to come by.
Over the medium term, however, NSW industrial demand is expected to be supported by a return to spending across the household, business and government sectors, as well as population increases.
“Key data suggests that growth in the transport, postal and warehousing, and wholesale trade industries is expected to strengthen over the coming five years in NSW, compared to the previous intervening period. However, growth in the manufacturing industry is expected to contract,” Mr Ducey noted.
The Newcastle/Hunter Valley and Tamworth/New England industrial precincts are predicted to lead growth in the state, with both boasting strong economies underpinned by the healthcare, education, retail, accommodation, professional services and construction sectors. Their air, road and rail transport links also place them as well-connected hubs.
M3 Property is keeping a close eye on two major industrial land releases in the Black Hill Employment Precinct at Beresfield, Newcastle, that incorporate a mix of small, one-hectare lots as well as super lots ranging from two to 10 hectares.
In Tamworth, meanwhile, the development of the Tamworth Global Gateway Park, a 246-hectare site underpinned by the new Tamworth Intermodal Freight Terminal, is expected to support a range of industrial uses.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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