Western Sydney airport takes region’s industrial centres under its wing

The forthcoming Western Sydney airport is set to prove fruitful for the wider region, specifically industrial hubs, when it opens in late October this year.

New research from Commonwealth Bank shows $24 billion in industrial development has been proposed around the new Western Sydney International (Nancy Bird Walton) Airport, set to increase the region’s floorspace for the asset class by 55% or 5.5 million square metres over the next 10 to 12 years.

CBA found the outer central west region now has the largest industrial development pipeline of 17 Australian regions the bank monitors.

“It’s been 56 years since the last public airport in Australia, at Tullamarine, Melbourne, was completed, so the chance to create completely new industrial and business areas of this type and scale, doesn’t often present itself,” said Kevin Stanley, CBA’s director of commercial property.

The region’s population growth is set to support the supply, which by 2041 is expected to increase by 26% or 653,000 people; Western Sydney’s population share of Greater Sydney is set to rise from 44% to 47%.

In addition, around $22 billion of transport and enabling infrastructure is set to be delivered; the new airport is curfew-free unlike Sydney Kingsford Smith Airport in Mascot, which will support demand for cold storage facilities supporting the handling of fresh food and refrigerated products for food retailers through the night.

Some of the most popular keywords in industrial buy and lease searches on realcommercial.com.au so far in 2026 relate to food storage and freezers.

The industrial sector has been one of Australia’s sustained commercial property bright spots; yields are compressing strongly, while Sydney’s industrial sector has the tightest yields in the country at 4.2%.

Enquiry levels for Western Sydney industrial properties on realcommercial.com.au are also strong, which experts attribute to the growth of e-commerce and logistics to support large retailers.

Four out of the 10 most-viewed listings in New South Wales in August were industrial properties in western Sydney; specifically, seven out of 10 of the most viewed and enquired industrial properties in NSW over the month were in the region.

Drivers will be able to access the airport from the M12 Motorway, initially known as Western Sydney Airport Motorway.

On the leasing side, five out of 10 of the most-viewed properties in NSW were industrial properties based in Sydney’s west.

While the new supply pipeline is welcome for the region, Ray White Commercial Western Sydney agent Andrew Sacco said it will lead tenants to chase higher-spec properties further west.

“We are seeing a lack of serviced and ready-to-be-developed industrial land available in existing precincts. As a result, we anticipate these areas will become quite competitive among owner-occupiers and developers,” he said.

“Due to the strong connectivity – servicing the western suburbs via the Northern Road and M12 motorway – we predict that tenant demand for quality industrial assets will be strong as tenants seek to minimise transit time and costs for goods and services.”

Western Sydney’s Nancy Bird Walton Airport will open in October. Picture: Britta Campion

The flight-to-quality phenomenon has been well-documented in the office asset class, where tenants covet newer, A-grade and premium offices – financial results from Mirvac illustrate this strongly – but this could be a relatively new phenomenon in industrial.

“Demand remains strong within the industrial sector, however, tenants, owner-occupiers, and developers want more value for their money,” said Joseph Assaf, RWC Western Sydney director.

“We are witnessing these groups move further out west as they begin to be priced out of the more established inner industrial precincts and are willing to travel slightly further for better value.”