Logistics platform ESR Australia has added 56,000 sqm to its logistics portfolio, securing two anchor tenants within the first stage of its Horsley Logistics Park in New South Wales.
Both a large US Package and Supply Management Company and Jalco, a subsidiary of packaging company PACT Group, have signed ten-year leases for a total of nearly 40,000 sqm of warehouse space.
As the COVID-19 pandemic imposed changes in consumer behaviour, the deals reflect an increasing demand for local manufacturing, distribution, and temperature-controlled warehouses in strategic locations.
To accommodate Australia’s need to provide greater availability of pharmaceutical products, UPS will be taking up about 15,700 sqm of temperature-controlled warehouse space, while Jalco will be taking up 20,260 sqm of space to accommodate the growing demand of their clients wanting to move their manufacturing to Australia.
ESR Australia CEO, Phil Pearce, said that the demand for quality warehouses in desirable locations, paired with the rapid demand for temperature-controlled spaces, has risen across Australia since the COVID pandemic.
“Many of our tenants are now wanting to become more independent, not having to rely on overseas distribution centres and manufacturing,” Pearce said.
“We’ve seen a shift in consumer behaviour over the past year, and with consumers making more purchases online, both retailers and delivery service providers, are looking for larger warehouses to accommodate this changed behaviour,” he said.
Jalco Group Australia’s Executive General Manager, Greg Beilby, said the company would invest over $30 million in manufacturing equipment and automation to streamline their processes and cater for the need of their clients, who range within the laundry and household cleaning, personal care,
automotive, promotional packaging space divisions.
“Domestic manufacturing of consumer goods is currently witnessing an increased market demand for onshore manufacturing as a direct response to COVID,” Beilby said.
“Many of our clients and their consumers are now seeking products that are produced and manufactured in Australia,” he revealed.
ESR, which last month bought the Milestone Portfolio from Blackstone in a historic $3.8 billion deal, purchased the 20.8-ha site from building products supplier CSR with a stage completion in 2019 for $142.5 million.
With these pre-commitments, ESR will build the whole 56,000 sqm across three separate warehouses.
Once completed, Horsley Logistics Park will provide around 111,000 sqm of premium warehouse space with an end value of more than $320 million.
Source: ESR