_Australia: NSW Infrastructure Boom - Implications for the Industrial market
Transport infrastructure in Sydney has long been considered second-rate in comparison to other major global cities. Sydney has long suffered chronic traffic congestion for motorists and a public transport system considered inefficient by commuters. However the NSW Government’s plan to spend $72.7 billion on infrastructure works over the next four years is set to be the catalyst in Australia for world class infrastructure and transport networks. In addition, the Federal Government has committed to an $18 billion infrastructure package for NSW over the next seven years.
Sydney is currently in the midst of an infrastructure boom with an unprecedented amount of funds being directed towards building a new airport as well as roads, tunnels and railways. The value of work commenced in NSW for transport infrastructure engineering as at December 2016 was $5 billion with an Annual Moving Average (AMA) of $2.8 billion, which includes the WestConnex, NorthConnex and Western Sydney Infrastructure Plan (WSIP) projects.
Whilst these projects will have significant implications on a broad mix of industries and general population, for the industrial sector, they will ultimately shape and determine the direction and magnitude of demand for industrial space in Sydney. Infrastructure projects of note which will have a significant impact for the industrial sector include the WestConnex, Sydney Metro, Moorebank Intermodal, WSIP and the Western Sydney Airport.
One of the contributing factors to Sydney’s traffic congestion and inefficient container movement stems from the Sydney metro region being almost solely dependent on Port Botany for container freight along with road transportation being the dominate means of freight movement. With freight movements expected to more than double at Port Botany by 2030 the addition of the Moorebank Intermodal (IMT) will provide an alternative and efficient solution for container freight movement between Port Botany and the broader Sydney region. Upon completion, the IMT will reduce freight traffic along key arterial roads via the dedicated rail freight line between Port Botany and IMT.
The $3.6 billion WSIP, funded by the Federal Government over the next 10 years, includes major road upgrades to Northern Road, Bringelly Road and the introduction of the M12 Motorway which will link the M7 and the upgraded Northern Road. These projects will improve connectivity across greater Sydney and improve transport times for industrial occupants in Western Sydney in addition to aiding the Western Sydney Airport upon completion. Additionally the State Government funded WestConnex project, due for completion in 2023, will ease congestion and connect local communities.
The new Western Sydney Airport, set to open by 2026, will become a major economic driving force for the Western Sydney region. The airport will generate approximately 30,000 new jobs once open and rejuvenate the Outer Western suburbs of Sydney with the infrastructure and amenity that will support the airport. On the back of this, the industrial sector will benefit from a newly formed industrial precinct which will service the airport in conjunction with 3PL, online retailers and transportation providers, benefiting from easier access and closer proximity to air freight.
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