Commercial real estate agents servicing Western Sydney have a golden opportunity to build their career, brand and agency on the back of the region being earmarked as “Australia’s engine room”.
Already an economic stronghold, Greater Western Sydney is home to one in 11 of Australia’s population and over the next decade its population is tipped to grow 25 per cent, to 3.2 million.
The growth forecast, in a NAB Horizons Special Report: Australia’s Engine Room, also revealed that over the next 20 years, GWS will absorb two-thirds of Sydney’s population growth.
Parramatta has already become a bustling new urban hub with hospitals, education facilities, new roads, train lines and more, while NAB’s Julie Rynski said much of what’s to come will centre around the new Western Sydney Airport at Badgerys Creek when it opens in 2026.
“The opportunities in Greater Western Sydney have never been greater, and things look set to get better,” she said.
“We’re looking forward to helping local businesses discover those opportunities – to kindle that spirit of entrepreneurship, take advantage of a new economy and step forward into a bright future.”
The time to prepare is now
For Ray White Commercial Western Sydney Managing Director, Peter Vines, the outlook is promising,
But he said with greater development and a population influx would come more real estate agencies and greater competition, which meant the time to prepare was now.
“Wherever there is development, wherever there is population growth, wherever there is infrastructure, there is opportunity,” Mr Vines said.
He said the best thing agents could do right now, and what he and his team were doing, was putting themselves in front of as many potential clients as possible.
“They need to be speaking with people all the time and they need to be creating opportunities,” Mr Vines said.
“They need their profile out there so that when somebody does want to sell you’re the person they think of, or you’re simply in the room.
“It starts with being in the room and then it moves to them not calling anybody else.”
Industrial in demand
The NAB report also highlighted that GWS industrial vacancy rates remained at record low levels of about 0.5 per cent and that positive face rental growth continued with year-on-year growth of 30 per cent.
Headline yields eased 0.31 per cent over the final quarter of 2023 to sit at 5.5 per cent now.
Dexus is looking to capitalise on demand by stepping up delivery of industrial storage and distribution facilities, starting construction of an estate in Chester Hill.
It’s one of three new estates it is developing in the GWS growth corridor.
The estate, at 149 Orchard Rd, Chester Hill, is due for completion mid next year, while construction is also underway on an estate at Moorebank and there are plans for a third development at Marsden Park.
These estates, together with the recently completed Circuit.7 in Glendenning, will deliver premium industrial space across about 117,000sq m of gross lettable area at a construction value of about $460 million.
Dexus Executive General Manager, Industrial, Chris Mackenzie, said customers were looking for modern, efficient industrial space in desirable locations.
“Our investments in Western Sydney will offer customers facilities with flexible designs that meet their specific needs,” he said.
“To support customers’ sustainability journey, the designs will include our battery infrastructure initiative aimed at helping customers meet their energy efficiency and carbon emissions targets.
“Our model of partnering with third party capital on investments and leveraging Dexus’s strong transactions, development and asset management capability has delivered returns to investors across our listed and funds management businesses.”
A lending boom
NAB also revealed that as GWS’s population increased, so too did the number of businesses and the lending required to support those operations.
“Across the board, businesses in Greater Western Sydney are borrowing to invest at a rate outpacing the economy at large,” Ms Rynski said.
“Overall, lending to businesses in the region grew by 9.9 per cent in 2023, compared to 7.1 per cent for the rest of NSW and 8.1 per cent for Australia.”
The education sector grew its borrowing 18 per cent in 2023, which was followed by sport and recreation at 17 per cent, hospitality at 15 per cent and construction at 13 per cent.
“As businesses in GWS expand and mature, they’re increasingly looking to Business Services (9 per cent) to add to their core competencies,” Ms Rynski said.
“Owner-operator and family businesses, whatever their size, remain a significant element of the GWS economy.
“But as investment continues to flood in, from external capital and lending, there will be more demand for accountants, lawyers, IT consultants and other professional services in the coming years.”
Office overload won’t last
Mr Vines said at the moment there was somewhat of an oversupply of office space in GWS, particularly Parramatta, on the back of a lot of new stock and many employees looking to stay working from home in the post-Covid climate.
However, he said with population increases, and the entrepreneurial nature of migrants moving into the area, more businesses would see greater amounts of office space taken up.
“I also think there will be buildings that get taken out of the market with build-to-rent,” he said.
“There will also be some that are knocked down and hotels will be built.”
Mr Vines said now was the time to identify potential future trends.
“Whenever you’re in an agency you need to be looking at what the future trends are going to be and start trying to move towards those before they happen,” he said.
“You want to put yourself in a position where you’re the go to person.”
