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Industrial Property News

ISSUE 168 | APRIL 2024 | 02 9630 8000 WWW.BAWDENS.COM.AU I N D U S T R I A L Industrial Property Values Set to Grow Further as e-Commerce Takes Off Trends In e-Commerce Fulfilment and Industrial Property Use Industrial Property in Short Supply in 2024 Industrial Land Values Outlook

IN THIS ISSUE OF INDUSTRIAL PROPERTY NEWS ISSUE 168 | APRIL 2024 | 02 9630 8000 | PAGE 2 We consider the possibility of further growth in industrial property prices for the year ahead. MARKET INSIGHT SPECIAL Industrial Property Values Set to Grow Further as e-Commerce Takes Off Bawdens is one of Sydney’s largest Asset Managers of SME (Small-to-Medium Enterprise) space for private clients. With over $3 billion in assets under management, we identified in part one of our e-Commerce survey, the reasons behind growth and success of lessees competing online (Refer to page 4). In part two, we identify how growth in the e-Commerce sector in Australia is likely to entrench owning a small industrial property as a key fundamental for investors and occupiers in the future. According to research conducted by Inside Retail on Australian Online Shopping, it has been revealed that over 1 million additional households are shopping online as compared to the year 2019. By 2033, it is expected that $1 out of every $3 will be spent online (a). Our SME tenants have recognised the growing desire from online shoppers to support businesses located closer to them. Social media platforms are sales channels in this area for SME’s. For example, Facebook and Instagram account users are recipients of digital ads making it a lot easier to find online stores, with 81% of online shoppers already using Facebook and Instagram to research products. Changing lifestyles will mean that last mile local fulfilment will have an increasing relevance to the consumers’ buying decision. The next 10 years will likely see a substantial demand for apartments as consumers continue to downsize, wanting a 24x7 delivery solution when they are not at home. Industrial property that will win in the years ahead will include proportionately large all-weather awnings, irrespective of the size of the warehouse to enable continuous fulfilment. For SME space, 9 metre clearance has become the new 7 metre minimum requirement, as material handling technology has enabled the use of larger volume metric space in smaller buildings. Less is more in office space as software technology platforms continue to centralise and outsource inventory and management functions, enabling fewer people to control more. Lastly, Sydney has a constrained supply of industrial land. The limited supply of land will see demolition of smaller, older, inner and central west buildings that reside on sites of 5,000m² or less. New facilities will be built to meet the needs from e-Commerce growth for last mile delivery to the increasing number of local online consumers, entrenching rental growth rates in various locations as replacement costs continue to increase over time. (a) Inside Australian Online Shopping L-R: Terry Saba and Robert Ally – Directors, Joumana Tarabay and Bechara Taoum - Associate Directors Asset Management

BAWDENS NEWS YLEASED BY MR Motor Group Pty Ltd Motors up in Seven Hills MR Motor Group Pty Ltd, currently located in Seven Hills, have relocated to 2/14 Welder Road, Seven Hills. Being a refurbished duplex of 376m² , the new lessee has taken on a lease for 3 years + 3 years at the asking rental of $65,000.00 pa net reflecting $172.00 psm + outgoings & GST. This deal was completed by Bawdens Director Terry Saba. As Real Estate Agents and Property Asset Managers, we conduct ourselves based upon a commitment to our vision to simplify, adapt, lead and grow our corporate property services. Our mission to connect people, organise, maximise and transact corporate property has meant as a group of professionals we have continued to thrive. The reason we continue to be a growing company today is because we remain aware that our purpose is to proudly protect our clients and earn their honest appreciated trust and friendship. VISION To simplify, adapt, lead and grow our corporate property services PURPOSE To proudly protect our clients and earn honest, appreciated trust and friendship MISSION We connect people, organise, maximise and transact corporate property VALUES Integrity, Passion, Leadership and Trust Our Why’ Story | PAGE 3 AUCTION DAY No Marketing Costs* (T&C’s apply) Lower Selling Fees Higher Prices Thinking of selling? • Be part of our Auction Day Sale • Expose your property to one of the largest buyer databases in Sydney • Use our auction negotiation skills to achieve the sale price you want Register your Interest: Call 9630 8000 or contact your preferred Bawdens Agent. • Brand new quality units • From 365m² to 1,879.7m² • 9.5m to 10.5m clearance • Yard area for added flexibility • Completion December 2024 Robert Ally: 0413 758 658 FOR LEASE Rouse Hill

MARKET INSIGHT SPECIAL Trends In e-Commerce Fulfilment and Industrial Property Use Bawdens is one of Sydney’s largest specialist Asset Managers for clients who own industrial property housing the city’s small-medium enterprises (SME). In the first of a two-part series, Bawdens recently released private client research that identified trends as to how our tenant SME’s are utilising their warehouse space today. The emergence of the importance of fulfilment is because increasingly SME’s are completing their own online fulfilment from their warehouse be that 200m2 or 2,000m2 space. Until recently, fulfilment from online customers of SME’s was outsourced to large specialist fulfilment providers. In 2022 in Australia, 82% or 9.4 million households made an online purchase valued at $63.8 Billion. In 2019, this was $28.6 Billion which highlights the continuing growth in online businesses. Today, we observe small-medium enterprises (SME) are increasingly sophisticated, agile and are taking market share from large multinational organisations. In a recent survey of lessees, we identified some of the following trends driving the desire of our SME tenants to invest and compete in the online universe: • The pandemic has changed the way consumers are prepared to shop. • Consumers want to support a local business online. • Social media commerce favours the SME. (In the US in 2022, the value of this trade source was $289 Billion and is projected to grow to $604 Billion by 2027.) • Improving reliability of connectivity and the advent of online shopping events like Black Friday. • Where appropriate, machine learning technologies are becoming increasingly available to SME’s that allow a (local to consumer) SME to deliver an individualised buying experience. • Our lessees have cited that having a mobile friendly website provides a competitive edge as more and more people are using their mobile devices for online shopping anywhere, anytime. In part two of our series, we consider how the future growth in online commerce will impact the demand for SME industrial property. | PAGE 4 FOR SALE Girraween 2,150m2 approx. Highly Exposed Freestander with Power & Cranes • Freestanding warehouse/office facility • Access via three (3) roller shutter doors • Internal clearances reaching up to 7.9m (approx.) • Triple driveway access and a generous hardstand yard area providing good container access, truck access and manoeuvrability • Ample on-site parking • Site area 3,776m² Robert Ally: 0413 758 658 John Tanna: 0419 124 544

ISSUE 168 | APRIL 2024 | 02 9630 8000 | PAGE 5 We currently support the following organisations: Vacancy Rate by m2 Vacant Properties Managed 0.7% Peter Pacetta: 0416 001 509 If this is something that you would also like to receive please feel free to contact COMMERCIAL Have you seen our new edition of BAWDENS NEWS SGM 4x4 & Commercials on the Move in Seven Hills SGM 4x4 & Commercials who stock quality used 4WD vehicles exclusively, to ensure that their customers are receiving the best cars available, have secured premises located at 27 Prince William Drive, Seven Hills. The freestanding building of 1,162m² of which 207m² is an office, was ideal for showcasing their stock. The lease term was 5 years + 5 years with a commencing rental of $226,590.00 pa net reflecting $195.00 psm + outgoings & GST. The deal was completed by Associate Directors Sales & Leasing Graeme Scott and Victor Zerefos. FOR LEASE Blacktown 1,070m2 approx. Freestanding Building • Additional mezzanine to rear or warehouse • Secured site • 40-foot container access • Easy access to M2 & M7 motorway Terry Saba: 0416 175 009 Robert Ally: 0413 758 658 Our asset management team can maximise the value of your asset. Lease Negotiations Rent Reviews Outgoing Audit Transaction Management Make-Good Management YLEASED BY LEASED BY

ISSUE 168 | APRIL 2024 | 02 9630 8000 | PAGE 6 BAWDENS ASSET MANAGEMENT Navigating Council Challenges for Approval In the pursuit of changing the usage of a vacant property, a tenant faced initial setbacks as their application was rejected citing discrepancies between the plans on record and the current layout of the property. This resulted in Associate Director Asset Management Bechara Taoum having to closely examine what aspects were historically part of the property and what changes were introduced by the tenant. Taking charge of the situation, Bechara identified the historical components through a detailed analysis of the approved plans and the current state of the property. Understanding the discrepancies, Bechara brought the owner and tenant together in a collaborative effort, along with the owners preferred contractors, to address and rectify the identified issues ensuring the works completed align with the approved plans from council. On completion of the works, the revised DA was submitted to council and approved. The successful application not only allowed the tenant to proceed with their planned changes in the property but also highlighted the importance of effective communication and coordination between stakeholders to overcome regulatory challenges. Simply search ‘Bawdens’ on YouTube. Subscribe to our YouTube • Stay informed: view our monthly Industrial Property News, weekly Market Brief and bimonthly Commercial Property News & Property Investor News • Find out what transactions we have just completed • Be up to date with the current market offerings For the latest media releases & market trends visit our website www.bawdens.com.au Leasing or buying Leasing Buying 41% 59% BAWDENS NEWS YGreenacre 1,496m2 approx. Freestanding Building • Main Road exposure • Easy access to major roads • Good truck access Anthony Barbanera: 0410 914 662 Rishad Kharadi: 0405 732 041 FOR LEASE YSOLD BY Seven Hills – Ripe for Refurbishment Sells for $5,198.00 psm An owner occupier Chuihung Pty Ltd has purchased a unit located at 5/36 Abbott Road, Seven Hills to cater their need for a full refurbishment. This high clearance warehouse measuring 227m² had been sold for $1,180,000.00 reflecting $5,198.24 psm + GST. This deal was completed by Bawdens Director Terry Saba.

ISSUE 168 | APRIL 2024 | 02 9630 8000 | PAGE 7 BAWDENS NEWS YSOLD BY MC Linked Acquires a Unit in Mulgrave: A Strategic Move in Food Product Expansion MC Linked, a company who offers a wide range of high-quality foods sourced exclusively from Australia, have purchased a street-front unit located at 18/26 Park Road, Mulgrave. The unit of approximately 328m² was sold for $1,600,000.00 reflecting $4,878.00 psm + GST. The deal was completed by Bawdens Associate Director Sales & Leasing Victor Zerefos. Freestanding Building • Split into 3 • Land size 1,465m² (approx.) • Invest or occupy- part or whole Robert Ally: 0413 758 658 Anthony Barbanera: 0410 914 662 FOR SALE Yennora 1,030m2 approx. Space in demand 0-500m² 500m² - 2000m² >2000m² 26% 35% 39% FOR LEASE Northmead 587m2 approx. Modern Industrial Warehouse • Open plan air-conditioned office • Semi-trailer/container access • Easy high clearance warehouse • Bus transit at front door Terry Saba: 0416 175 009 Seven Hills 407m2- 847m2 approx. Freestanding Warehouse/Duplex Option • 40-foot container access • High clearance warehouse • Three (3) phase power • Modern air-conditioned office • Unit 1: 407m² (approx.) • Unit 2: 440m² (approx.) • Total: 847m² (approx.) Terry Saba: 0416 175 009 FOR LEASE www.linkedin.com/ company/bawdens Follow us on LinkedIn • Stay informed • Find out what transactions we have just completed • Be up to date with the current market offerings

ISSUE 168 | APRIL 2024 | 02 9630 8000 | PAGE 8 YNorth Ryde Blacktown Seven Hills Girraween Silverwater Glendenning Minchinbury Seven Hills Rydalmere Seven Hills Bawdens Deals Done LEASED BY LEASED BY SOLD BY SOLD BY LEASED BY SOLD BY SOLD BY LEASED BY LEASED BY SOLD BY MARKET INSIGHT SPECIAL Industrial Property in Short Supply in 2024 Investors and occupiers of industrial property will continue to largely retain their properties this year, as they did in 2023. The Industrial property sector will remain one of the most desirable asset classes to own in 2024. With rental cash flow growth already outpacing, the growth in rentals from inflation adjusted annual rental reviews, investors understand the ability of this asset class to protect their earning power in a period of inflation. In late 2023, Bawdens completed a survey of a selected groups of tenant businesses whose property they manage for the lessee and the lessor. The survey revealed that many lessees during 2023 expressed not being able to manage the rising expenses and hence accepted less profit margins. However, the survey of sentiment identified that most businesses in 2024 will be focused on recovering the required profit margins by increasing prices. For this reason, the survey participants identified there is a growing possibility of resurgent inflation in the year ahead, fuelling further growth in the prices of goods and services. The survey participants also identified that price increases would likely still be required even if the interest rates were to rise further in the year ahead.

ISSUE 168 | APRIL 2024 | 02 9630 8000 | PAGE 9 BAWDENS NEWS YLEASED BY DLS Fleet Rentals Drives into Blacktown DLS Fleet Rental who specialises in organising and running your work vehicle simply have leased premises located at 2/55 Fourth Avenue, Blacktown. The 172m² unit is conveniently located in Blacktown CBD which made it ideal for their usage. The commencing rental was $31,000.00 pa net reflecting $180.00 psm + ougoings & GST. The deal was completed by Sales and Leasing Negotiator Jarrad Love and Bawdens Director Terry Saba. FOR LEASE Auburn 300m2 approx. Designer Showroom and Office • 72m² high clearance warehouse • Downstairs fully air-conditioned showroom • Open plan office upstairs • Easy access and parking for customers Anthony Barbanera: 0410 914 662 Robert Ally: 0413 758 658 Barry Cawthorn: 0417 288 975 | Robert Ally: 0413 758 658 If this is something that you would also like to receive please feel free to contact Have you seen our new edition of FOR SALE Website Enquiry Real Commercial Commercial Real Estate Google Other 22% 11% 33% 34% BAWDENS ASSET MANAGEMENT Asset Management Vacancy Rate Office Industrial Retail 3.28% 0.59% 3.57% Thornleigh 371m2 approx. Quality Industrial Unit Located Just Off Pennant Hills Road • Proximity to M1, M2 and minutes away from Pennant Hills Road • Automatic roller shutter • Parking at the door • Bonus additional office space of 92m² (approx.) • Additional mezzanine storage of 73m² (approx.) • Secured complex • Invest or occupy • Nearby Thornleigh Station and public transport Jarrad Love: 0408 817 025 | Monjer Khan: 0422 753 262 FOR LEASE North Parramatta 650m2 approx. Freestanding Factory with Exposure • Clear span warehouse • Main Road exposure • Refurbished office • Onsite undercover parking • Good truck access • Minutes away from Cumberland Highway & James Ruse Drive Jarrad Love: 0408 817 025 Monjer Khan: 0422 753 262

ISSUE 168 | APRIL 2024 | 02 9630 8000 | PAGE 10 BAWDENS ASSET MANAGEMENT Asset Management – Maximising Property Revenue through Market Driven Adjustments Associate Director Asset Management Tony Youssef had been appointed to take over the management of a property that was initially self-managed by the owner under a gross lease. It was observed that no rent increases had been applied during that period. Recognizing the opportunity for an adjustment in line with market rates, Tony initiated discussions with the owner to implement a more competitive and current rent structure. Tony also recommended the client to transition from a gross lease to a net lease which will ensure a fair distribution of costs between the owner and the tenant. Under the previous self-management, the tenant paid a fixed rate of $129 per square metre, amounting to $55,728.00 per annum gross plus GST. Following the renegotiation and the shift to a net lease, the tenant is now responsible for a base rent of $171 per square metre, approximately $40 per square metre for outgoings. This restructuring resulted in a significant increase in rental income for the owner, with the tenant now paying $91,072.00 per annum gross plus GST. The transformation not only brought the property’s financial arrangements in line with market trends but also demonstrated the positive impact of strategic lease management on overall property revenue. Simply search ‘Bawdens’ on Facebook. Like us on Facebook • Stay informed: view our monthly Industrial Property News, weekly Market Brief and bimonthly Commercial Property News & Property Investor News • Find out what transactions we have just completed • Be up to date with the current market offerings FOR LEASE Parramatta 138m2 approx. Office in the Heart of Parramatta • Air-conditioned • Partially furnished • Proximity to Parramatta CBD • Secured car park • Onsite amenities and kitchenette • Partitioned offices • Main Road exposure Anthony Barbanera: 0410 914 662 Bawdens use their e-cloud technology to complete behavioural marketing that identifies the buyers or tenants who will pay the highest price or rental. We are Sydney’s only Industrial Agency utilising behavioural marketing. MARKETING Where it all came from Internet Bawdens IPN Signs Clients 21% 30% 45% 4% FOR LEASE Lidcombe 225m2 approx. Modern Office/Warehouse • Short walk to bus and train station • Ground floor reception/showroom • After hours security gate • Easy access to Sydney’s arterial road network Terry Saba: 0416 175 009 Simply search ‘Bawdens_RealEstate’. Like us on Instagram • Stay informed • Find out what transactions we have just completed • Be up to date with the current market offerings

ISSUE 168 | APRIL 2024 | 02 9630 8000 | PAGE 11 BAWDENS ASSET MANAGEMENT Asset Management – Upholding Fire Safety in Strata Buildings Asset Managers hold a key role in ensuring that the fire compliance and safety standards are met and maintained. This remains essential even in strata buildings where the Strata Manager oversees these works. The responsibility extends beyond the individual units to shared spaces and common facilities within a building, emphasizing the need for a collaborative and communicative relationship between Property and Strata Managers. Property Managers must actively oversee fire safety measures, engaging in regular communication with Strata Managers, setting clear expectations, and ensuring prompt action in rectifying any deficiencies to create a safer environment for all occupants. Furthermore, Asset Managers should exercise due diligence in the selection and ongoing evaluation of strata management services, prioritising firms with a proven commitment to fire safety. By establishing stringent guidelines and benchmarks, Asset Managers contribute significantly to fostering a culture of accountability, creating a safer working environment, and safeguarding property assets. This proactive and vigilant approach is paramount for the overall well-being of the community and the longevity of the properties under their management. Vacancy by No. of Properties Vacant Properties Managed 1.4% Are you looking to sell your property in 2024? With a 100% success rate, utilising this method of sale you will achieve a price better than you expected, which will allow you to realise your new ambitions. Our In-Room auction facility delivers you the highest probability of an exceptional price. Let Bawdens present your property professionally and use our negotiation skills to deliver you the highest possible price. AUCTION WITH US Register your Interest: Call 9630 8000 or contact your preferred Bawdens Agent. • Brand new quality units • From 369.7m² to 760m² • 6.5m to 7.3m clearance • Completion December 2024 Robert Ally: 0413 758 658 FOR SALE Rouse Hill Silverwater 1,190m2 approx. Freestanding Building • Proximity to major arterial roads • High clearance warehouse • Access via two (2) motorised roller shutter doors • Small office and amenities • Good truck access Monjer Khan: 0422 753 262 Robert Ally: 0413 758 658 FOR LEASE

ISSUE 168 | APRIL 2024 | 02 9630 8000 Disclaimer Notice: Neither Bawdens, nor the publishers and editors of articles in this issue accept any form of liability, be it contractual, tortious or otherwise, for the contents of this newsletter or for any consequences arising from its use or any reliance placed upon it. All the information contained in this publication has been provided to us by various parties. We do not accept any responsibility to any person for it’s accuracy and do no more than pass it on. All interested parties should make and rely upon their own enquiries in order to determine whether or not this information is in fact accurate. Customised relevant marketing means maximum results. We are the only agency with real time database management. Instagram Facebook LinkedIn YouTube Simply search | PAGE 12 MARKET INSIGHT SPECIAL Industrial Land Values Outlook In 2023 rising construction costs and investment yields have tested feasibilities. As a result, land values have steadied in the SME market as developers and owner occupiers have exercised more caution. Currently land values in more central western suburbs range between $1,200 - $1,500 psm for lots with an area of less than 10,000m2. With most inner west and central west locations offering no availability of sites with an area of less than 10,000m², this lack of developable sites will ensure that current pricing will remain broadly unchallenged, despite the possibility of continued upward pressure on yields due to rising interest rates. Land values will be further supported from the recent and continuing growth in net rentals in the year ahead. These factors, when combined with eventual interest rate certainty, will see a return of owner occupier confidence in long-term appreciation of industrial property resulting in increased demand in the medium term.

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