“We’d be disappointed if we didn’t double that in four to five years’ time,” he said.
A specialist business unit of Singapore-listed real estate giant Frasers Property Limited, which has about $44 billion of assets under management, FPI has its roots in the commercial and industrial division of former ASX-listed Australand Property Group, which Frasers acquired in 2015.
The majority of FPI’s portfolio is focused on Australia’s east coast where it has developed large, state-of-the-art facilities for clients including Techtronic Industries, Symbion, ASX-listed IVE Group, National Tiles and Goodyear.
“We’ve traditionally done a lot of pre-committed facilities and then off the back of that, some speculative product,” Mr Barter said.
“But this new estate will have a higher percentage of speculative development, given the low vacancy rate in the precinct. We will create a more generic product, where we can attract a rental premium,” he said.
Highlighting the strength of the industrial market, FPI’s existing portfolio is 100 per cent leased. Mr Barter said rents were rising strongly across all markets.
“The biggest increases are occurring in Sydney, especially in the west, where the vacancy rate is close to zero, and in Melbourne. Rental growth is also pretty strong in Brisbane,” Mr Barter said.
He said tenants were more focused on servicing their customers in the most efficient manner, than on getting the cheapest rents.
The new estate to be developed at Kemps Creek will flow on from the nearby 118ha The Yards estate, which FPI is developing with Altis Property Partners and Aware Super.
The Aldington Road site is a consolidation of seven individual blocks, the majority of which FPI secured under option agreements a few years ago, before the latest surge in Western Sydney land values to about $450 per square metre.
FPI did not disclose what it paid for the Kemps Creek site, but property records show the developer has spent more than $150 million on land on Aldington Road since July last year.
FPI plans to develop between 15-20 facilities on the new estate as well as health and wellbeing amenities including green space, outdoor exercise equipment, and food and beverage outlets.
As with its other estates, FPI will target a 5-Star Green Star rating from the Green Building Council of Australia.
Mr Barter said FPI decided many years ago to take a leading position on sustainability in the industrial property sector. Since 2015, it has installed 10 megawatts of solar power generation on its estates, the equivalent of taking 2500 cars off the road every year.
“We’re focused on carbon reduction – both ours and our tenants’,” he said.
FPI’s pipeline of projects will add another 442,000 sq m of warehousing once completed, the equivalent of 22 MCGs.
They include a 30,824 sq m warehouse, print production and office facility at its Braeside Industrial Estate in Melbourne’s south-east developed for media and marketing company IVE Group.
The newly completed facility is the first to be developed under FPI’s new standardised building guidelines, which use high-quality and sustainable materials not typically found in traditional warehouses.