Rents across Sydney are rising with the same ferocity as the recent spate of hailstorms that cut a swath across western and northern suburbs have caused havoc, with many office and industrial properties needing to be evacuated
According to the major insurers, Suncorp and IAG, they received more than 31,000 claims from customers when the storms hit the Sydney basin on February 18, causing an estimated $370 million damage.
The same occurred on Anzac Day, 2015, when industrial properties in Sydney’s west were destroyed, costing about $300 million in insurance and forcing rents up three-fold as groups such as Metcash, whose building’s roof collapsed, had to find short term accommodation.
In April, 1999, after another big storm hit Sydney’s eastern and southern suburbs rents for short-term leases rose an average 20 per cent.
Agents at CBRE said due to the February storms, they had leased more than 40,000 square metres of warehouse and yard space across western and northern Sydney.
CBRE’s A&T – industrial & logistics team received several requests from predominantly emergency automotive businesses looking for space across northern and western suburbs after their buildings were damaged by hail.
Acting on behalf of several institutional and private landlords, CBRE negotiated five deals without incentive.
In one deal, Action Smart Repairs signed a six-month lease on two units at 12 Frederick Street, a commercial and industrial property in St Leonards. The 3145 sq m space was negotiated at a net rental of $225.85 per sq m gross.
In Macquarie Park, Action Smart Repairs also committed to a six-month lease on a 2753 sq m property at 44 Waterloo Road. The deal reflected a rental of $160 per sq m gross.
Action Smart Repairs also leased a 6537 sq m warehouse property in Castle Hill’s Anella Avenue. The rental was $122 per sq m net.
In a fourth deal, Pickles Auctions leased a 27,090 sq m yard at 37a Grand Avenue in Camellia for an initial three-month term. The rental was $30 per sq m net.
Meanwhile in Lane Cove, Dent Craft Hail Group is set to move into a 2416 sq m property at 12 Mars Road after signing a three-month lease with further options. The rental is $252.81 per sq m gross.
The CBRE team responsible for the transactions include John Karlovasitis, John Micallef, Matthew Alessi, Peter Mangraviti, Tristan Winterschladen and Rajal Chaudhary.
“The requirements came to fruition shortly after the hail storm that hit Sydney on Saturday, February 18. Our western and northern Sydney operators were proactive in sourcing property and inspecting with the successful tenants in less than 48 hours following the storm, with most leases finalised within a few days,” Mr Karlovasitis said.
In 2015, agents at Savills’ industrial team said before the storms there was a total vacancy of about 550,000 sq m of space, ranging between 10,000 and 25,000 sq m in western Sydney.
But in the two weeks following the storm, there was a take-up of 130,000 sq m of short to mid-term lease space, a 25 per cent take-up of stock.Continue Reading →