UPDATE: Stockland has just announced plans to develop a monumental $3.5 billion multistorey logistics hub at the former Kogarah Golf Club site in Sydney, a move set to transform the region’s economic landscape. This urgent development aims to streamline the transport of goods to and from Sydney Airport and Port Botany, with construction set to commence in 2027.
The project, a joint venture with John Boyd Properties, will span 340,000 square meters and is expected to create approximately 4,500 direct and indirect jobs once operational. Stockland CEO Tarun Gupta emphasized the project’s significance, stating, “There will be a big ecosystem of economic activity that will come out of the distribution and logistics hub.”
This ambitious project comes at a crucial time as Sydney grapples with a pressing need for urban infill sites. While the city is under pressure to develop new housing, Gupta noted that the Kogarah site is better suited for logistics due to its prime location near major roadways, including the M1, M5, M8, and the future M6 motorway.
Stockland, which is pivoting its focus towards industrial and residential properties while scaling back on retail, is looking to secure capital partners such as KKR and M&G Real Estate as planning progresses. The company currently reports a gearing of 27.9 percent, raising questions about funding strategies for this massive undertaking. UBS analyst Tom Bodor highlighted concerns over funding the project, stating, “If they use third-party funding to deliver the project, it may require asset sales or partnerships elsewhere.”
The Commonwealth Bank of Australia is backing the project as its sole underwriter, showcasing its commitment to high-quality logistics assets in strategic locations. “This multi-tranche loan facility demonstrates our ability to structure bespoke solutions driven by client needs,” said George Vallas, head of real estate at CBA.
While the logistics hub will occupy only about a quarter of the site, the remaining land will be transformed into Pemulwuy Park, a 14-hectare public park that will reconnect the community with the Cooks River. Bayside Council Mayor Edward McDougall praised the proposal, calling it a “fresh chapter for Bayside” that will generate “significant job creation and economic opportunity.”
The Kogarah Golf Club, which closed in March, sold the site to John Boyd Properties, whose director John Boyd expressed confidence in the project’s potential to attract premium global tenants. “This is a project that will carry a strong legacy and capitalize on Sydney’s growing trade volumes,” he stated.
As this project unfolds, Stockland continues to face scrutiny regarding its funding strategy and market positioning. Stockland shares saw a slight increase of 3.5 cents to $5.44 following the announcement. Investors eagerly await the company’s full-year results set for August 20, which will provide further insights into its financial direction.
With its strategic location and potential economic impact, the Kogarah logistics hub is poised to redefine the future of logistics in Sydney, making it a project that stakeholders and the community will watch closely in the coming years.
