article on industrial developments coming back

A few weeks old so sorry if already posted.

Industrial pipeline unblocked as demand picks up Florence Chong From: The Australian December 17, 2009 12:00AM

MORE than $2.5 billion worth of industrial development projects that had been shelved this year are expected to get under way within months, as signs emerge that demand is picking up.
Listed industrial trusts Goodman Group, ING Industrial Fund, Dexus and GPT have announced plans to restart suspended developments soon, having recapitalised after being paralysed by the credit freeze and high debt.

Australia's largest industrial property developer and owner, Goodman Group, has received inquiries on pre-releasing almost 900,000sq m of space.

It is close to signing with a tenant, believed to be Kmart in Victoria, which has pre-committed to 74,000sq m of industrial space.

Investa Property Group sold two small sites in the past month, while Dexus is expected to close deals soon, after the NSW government approved its $420 million industrial estate at Greystanes, in Sydney. Goodman Group chief executive Greg Goodman said the group pulled $860m worth of projects 12 months ago, but it had kicked off its development program to meet pent-up demand.

"By next year, we will have $1.5bn of development under way in Australia and overseas -- Hong Kong, the United Kingdom and Europe," Mr Goodman said.

The funding would come from the group's partners and its own balance sheet, which had available liquidity of $l.4bn.

GPT industrial head Victor Georos said: "For the first time in 12 to 18 months, we are seeing a sustained level of broadly based demand from a range of tenants."

The trend was particularly evident in the past two to three months, Mr Georos said.

Dexus Property Group industrial head Andrew Whiteside said it would be difficult to find space of more than 10,000sq m in a modern building in Sydney or Melbourne. "There has been no new supply in the past year," Mr Whiteside said.

"We were close to starting a project in Melbourne when the market changed quickly and we have not been active in Sydney."

Mr Georos said supply dropped by 47 per cent this year to 1.4 million square metres, down from 2.5 million square metres last year. Supply was likely to remain low well into next year.

GPT owns industrial assets in four states, worth about $750m, and has about $800m worth of projects on hold.

A pick-up in imports and exports triggered the rise in demand for industrial space, he said.

In October, the volume of containerised trade handled by Sydney port rose 6 per cent -- the first pick-up in the past 18 months. after dropping 5 per cent in the 12 months to June 30, and another 3 per cent up to September.

"The strong Australian dollar means imports are increasing at a time when companies are starting to restock their inventories after allowing them to run down." Mr Georos said.

He said GPT completed a 16,000sq m building, leased to Goodman Fielders for 20 years, at Erskine Park in western Sydney late last year. "We will finish a 13,000sq m project, leased to Target for 12 years, in February," he said.

Leading industrial players said industrial assets' values and rents had not collapsed. ING Industrial Trust chief executive Paul Toussaint said occupancy hovered at 97-98 per cent in the past 12 months for his portfolio of two million square metres of industrial assets. ING had developments valued at $700m, and it was likely to resume work on some projects next year, he said.

Dexus -- the third-largest industrial player in Australia, owning 54 properties worth more than $2bn -- bought a large site at Greystanes from Boral, covering 47ha, for about 240,000sq m of warehouse and office space.

"If a tenant comes in today I would be able to build a warehouse in nine to 12 months," Dexus's Mr Whiteside said.

Dexus is expected to complete its first buildings in Greystanes next year. The entire development is scheduled to finish in 2015.