ESR joins multi-level warehouse race

The 4.3 hectare Banksmeadow site contains multiple buildings.

ESR Australia has secured a large Banksmeadow industrial site with a five year leaseback – and plans to replace it with a multi-level warehouse after.

Allnex offered the Banksmeadow property with a five year leaseback.

The fund manager is paying $143 million for the 4.3 hectare holding at 49-61 Stephen Road.

The end value, with the proposed 58,000 square metre building, will circle $300m.

Coating resin manufacturer Allnex was the seller.

Its leaseback if for an initial five years.

“Allnex recognises the shifts within the Australian surface coating market, both geographically and technologically, and is proactively taking measures to ensure the continuity of our operations,” the company’s vice president, Commercia, Southeast Asia, Australia and New Zealand, Zel Medak, said.

“We are pleased to reach an agreement with ESR to ensure minimal disruption and to continue to provide our customers with high quality and innovative products,” he added.

The Botany Bay precinct carries an industrial vacancy rate of less than 0.2 per cent, according to landlord, and where prime rents have increased 37.2pc over the past 12 months with another 15pc rise forecast before this calendar year is out.

Elsewhere in the area, near the airport, and Port of Sydney Goodman and LOGOS with the Abu Dhabi Investment Authority and Australian Super are proposing multi-level warehousing – the latter on sites recently acquired from Qantas for $802m in late 2021 (story continues below).

Hale Capital Partners and LaSalle Asset Management are also delivering an asset of this type, at Matraville, which they sold earlier this month on an as-complete basis to Boston based Cabot for c$150m.

Colliers’ Trent Gallagher and Michael Crombie brokered the Stephen Rd deal.

Another asset for GIC-backed fund

The Banksmeadow property will be held by the ESR Australia Development Partnership II, of which Singapore sovereign investment fund GIC is a cornerstone backer.

“The acquisition takes the ESR development pipeline in Australia to $7.9 billion at a time when demand for logistics property has never been higher,” a company spokesperson said.

“In line with its strategy, EADP II will re-develop the asset into a core logistics estate,” they added.

“The property has planning controls with no floor space ratio (FSR) or height limits, providing a significant opportunity to develop multi-level warehousing on the site”.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of