Amazon unveils huge Sydney warehouse

Amazon unveils huge Sydney warehouse

17 August 2018

Amazon has opened its second Australian warehouse, a mammoth new fulfillment centre at Moorebank, near Liverpool in south west Sydney, reports Business Insider Australia.

The 43,000 square-metre facility is the size of around six football fields and is double the size of its warehouse in Dandenong South, Melbourne, which opened last year.

Amazon’s Director of Operations Robert Bruce said the new centre will make delivery times to Australia’s east coast more reliable.

“The new Sydney centre builds on the capabilities of our first fulfilment centre in Dandenong South in Victoria, and expands our ability to service the growing customer demand.”

Liverpool mayor Wendy Waller told Channel 9 Finance the centre will provide a number of jobs for locals.

“We look forward to having good jobs for people close to where they live and working with Amazon as a partner in the local community,” Waller said.

“We expect the Sydney fulfilment centre will become a key logistics hub thanks to its strategic position in South West Sydney.”

Western Sydney has emerged as a warehouse hotspot as logistic companies work to outflank rising Sydney land prices while ensuring easy access to Sydney’s busy port and the planned Western Sydney Airport at Badgerys Creek.

Dutch logistics giant CEVA is planning to create a multi-user ‘super site’ warehouse in Sydney’s west, having already set up similar mega facilities in Melbourne, Brisbane and Perth, says Sydney’s Morning Herald.

Last year CEVA signed a four-year lease over a new 19,000 square meter warehouse and office facility at Minchinbury in Sydney’s west, part of Mirvac’s Calibre development.

The company’s contract logistics arm also has 36,000 sqm of multi-user space at nearby Erskine Park, owned by Goodman Australia.

The expiry of the Erskine Park lease in 2020 will be the likely catalyst for consolidating to the proposed super centre.

Industrial warehouses are also increasingly being built in Sydney’s West without pre-commitments from tenants, notes JLL.

Historic low vacancy combined with increasing rents and pent-up demand—especially from third party logistics providers and online retailers—is giving investors the confidence to build first and then seek out tenants.

Current demand means the chance of securing a tenant before practical completion is as high as 80 percent, says Peter Blade, from JLL’s Western Sydney Industrial team.

Investment allocations towards the industrial sector have rocketed, says Blade.

“The underlying demand for industrial logistics assets in Australia has shifted; distribution centres are among the best risk-adjusted real estate performers,” he said.