Rental Comparables:10 Cullen Place, SmithfieldLease Date: March 2020Lettable Area:976 sqmNet Rental: $126,880Rate PSM: $130Comments: Comprises office and warehouse with portal frame and concrete panel walls. Warehouse provides clearance up to 9.5 metres. Two container sized roller shutter doors provide access to the warehouse. First floor office accommodation is carpeted, partitioned and air conditioned.Smaller lettable area than the subject with similar improvements. The subject will reflect lower rate psm.
10 Enterprise Place, Wetherill ParkLease Date: April 2019Lettable Area: 1,290 sqmNet Rental: $165,120Rate PSM: $128Comments:Comprises a 1990’s construction with refurbished warehouse and office. Access via container height roller shutter door. Office provides open plan and partitioned office spaces, carpet tile flooring and ducted air conditioning. Slightly smaller lettable area than subject, with higher rate psm.
6A Hume Road, SmithfieldLease Date: July 2019Lettable Area:1,190 sqmNet Rental: $142,800Rate PSM: $120Comments:Warehouse and office accommodations comprising concrete panel construction and metal deck roof. Access via two roller shutter doors and provides clearances of 5.6 – 6 metres. Office accommodation is situated at the front of the building, with carpet flooring, ducted air conditioning and glass partitioned offices. Slightly smaller lettable area to subject. Overall indicates a similar rate psm.Based on comparable sales per appendix figures 11 and 12, the following confirmsthe valuation. The site value adopts a rate of $1,500/sqm and the building value adopts a rate of $2,500/sqm.Site Area Adopt Rate/sqmValue2,968sqm $1,500/sqm $4,452,000 Building Area Adopt Rate/sqm Value1,998sqm$2,500/sqm $4,995,000 Therefore, the value of $4,830,000 is adopted.Market Review
While Covid-19 has had a profound impact on the economy and the commercial property market, the effect on the industrial sector has been less acute than other segments of the market. As sentiment around retail and offices collapsed in the second quarter, the fallout around industrial properties was comparatively limited (NAB Group Economics, 2020). This can be related to the current accelerated growth in e-commerce, which creates demand for the industrial sector (Smith, 2020). While the health pandemic has caused major collapses within the economy, there has been an increased consumer demand for e-commerce as a result of the failing of the retail sector. As a result, occupiers have turned to their supply chains to generate efficiency as investors seek industrial assets to increase future return (CBRE, 2020). According to NAB, while industrial values are expected to fall moderately in the next 12 months, the outlook beyond that is positive (NAB Group Economics, 2020). Research conducted by CBRE confirms this as throughout the lockdown, there was a surge in Australian manufacturing. However, industries dependent on international trade struggled to operate. However, it is expected that occupiers will be holding more stock domestically to mediate interruptions to supply chains. Consequently, occupiers will need more space to accommodate higher inventory levels (CBRE, 2020). While there has been a decline in