UPDATE: Stockland has just announced a groundbreaking plan to develop a $3.5 billion multistorey logistics hub on the site of the former Kogarah Golf Club in Sydney‘s southern suburbs. This significant project aims to streamline the transport of goods to and from Sydney Airport and Port Botany, marking a major shift in urban development within the region.
The ambitious project, in collaboration with John Boyd Properties, will encompass a massive 340,000 square metres of warehouse space. Construction is slated to begin in 2027, with Stockland’s CEO, Tarun Gupta, confirming that the development will unfold in several stages to meet the growing needs of logistics and distribution.
“This multi-tranche loan facility demonstrates our ability to structure bespoke solutions driven by client needs,” stated George Vallas, head of real estate at Commonwealth Bank of Australia, which is the sole underwriter for the project. The logistics hub is set to create approximately 4,500 direct and indirect jobs, a critical boost for the local economy as Sydney continues to grapple with housing and employment challenges.
As Stockland shifts its focus from retail and retirement living to industrial and residential projects, the company is seeking to attract capital partners to support this monumental venture. Gupta noted, “We’re very confident a project of this nature will attract very strong institutional capital partner interest.”
However, concerns over funding linger. Stockland’s gearing rose to 27.9 percent as of February, prompting analysts to question the firm’s capital allocation strategy. “If they use third-party funding to deliver the project, there is less of a capital allocation towards logistics,” commented Tom Bodor, a UBS analyst.
The logistics facility will feature five-level warehouses, retail, and commercial spaces, strategically located near major arterial roads including the M1, M5, M8, and the upcoming M6 motorway. Only a quarter of the former golf course will be utilized for construction, with the remaining area being transformed into Pemulwuy Park, a new 14-hectare public park that will enhance community access to the Cooks River.
Bayside Council Mayor Edward McDougall expressed optimism, stating, “This proposal represents a fresh chapter for Bayside – one that brings significant job creation and economic opportunity to our city.”
As the logistics hub progresses, it is set to become a vital center for economic activity in Sydney, a city in desperate need of infrastructure that supports both housing and job creation. Gupta emphasized the importance of this development, saying, “There will be a big ecosystem of economic activity that will come out of the distribution and the logistics hub that this will create.”
Stockland’s shares saw a slight increase of 3.5 cents, approximately half a percent, closing at $5.44 following the announcement. The company is expected to release its full-year results on August 20, with a second-half distribution of 17.2 cents per security announced last month.
This project represents a significant investment in Sydney’s future, poised to redefine the landscape of logistics and distribution in the area. Stay tuned for further developments as Stockland pushes forward with this transformative initiative.
