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Tuesday, 29th April 2025
Food Operator Forks Out $21M For Sydney Warehouse Site
The tenant of an industrial warehouse in Sydney’s west has purchased the asset in a $21 million deal that future proofs its plans to invest in major technological improvements at the facility.
The 4,000sqm property, located in Huntingwood, was acquired in an off-market transaction facilitated by commercial buyers’ agency Prosper Group.
Prosper Group Managing Director, Alex Henderson, said the deal took 12 months to complete for the established food-operator and reflects a broader industry trend of tenants transitioning to owner-occupiers to lock down their costs.
“Rising rents are fuelling tenant appetite to acquire their own premises, however landlords have been reluctant to divest for this very same reason,” Mr Henderson said. “In this instance, the tenant was facing a 50% rent increase at the end of 2025, from $200 per sqm to $300 per sqm.”
Mr Henderson said the acquisition would allow the family-owned business to invest in new technology to streamline their processes – an outlay which only stacked up if they own the asset.
“Securing the premises they have occupied for the past five years will enable them to grow their business and further improve the asset, adding significant value to their operations,” he said.
“Ultimately the sale has delivered a great outcome for both parties. It has also reinforced the underlying value in Sydney’s industrial sector, particularly well-located warehouse assets between 2,000sqm and 5,000sqm close to major transport networks.”
Prosper Group Director Beau Stewart said tenants looking to purchase industrial assets needed to start the process years before their lease was for due for renewal.
“Industrial warehouses remain one of the most tightly held assets in the commercial property space,” Mr Stewart said.
“Anyone wanting to become an owner-occupier in the industrial space is looking at a two-year runway because of the time it takes to find the ideal property and complete the required works to ensure the property is efficient for their business.
“Further, a two-year lead time allows properties with 12- 18 months remaining on their lease to be considered, expanding potential options.”
Mr Stewart said off-market transactions were a complex process, but the opportunities were there for patient capital.
“Our due diligence approach looks for reasons not to buy a property – if there are none, we know we have identified a strong performing asset, and we can look our clients in the eye and tell them we’ve delivered the best solution for their business and/or investment goals and appetite,” he said.
In addition to tenants, he said family offices and property trusts were also actively pursuing opportunities in the industrial sector, with Sydney and Brisbane sites presenting the strongest appeal.
Established in Sydney in 2005, Prosper Group is Australia’s first commercial buyers’ agency with established advisory and asset management services. In 2017 the group acted as the commercial buyers’ agent on the $96 million purchase of 8 Khartoum Road in Macquarie Park, which remains an Australian record.