Amazon builds new mega warehouse as shoppers seek out larger items

Amazon Australia has extended its footprint across the country with the development of two new super-scale robotics-led centres amid strong growth in online purchases of bulky goods such as furniture and flat screen TVs.

In Sydney’s west, the tech giant has unveiled plans for a $490 million investment in two new fulfilment centres on land owned by industrial property giant Goodman, Brickworks and ESR, at the Oakdale East Industrial Estate in Horsley Park.

Renders of the planned Amazon fulfilment centre in western Sydney.

These follow the development of Craigieburn Logistics Estate, in northern Melbourne, announced in August last year on the AustralianSuper-owned site, which is managed and developed by LOGOS Property.

That fulfilment centre will span around 209,000 square metres across four levels, equivalent to 11 Melbourne Cricket Grounds, or five times the size of Federation Square, making it the largest warehouse ever built in Australia.

NSW Premier Chris Minns officially launched the construction of the purpose-built Sydney site, which is targeting completion in early 2026. The site will be around four and a half times the size of the Sydney Opera House or Barangaroo Reserve, equal to 80,000 square metres.

Amazon Australia’s country manager Janet Menzies said that once completed, the new Sydney site has capacity to hold up to 1.6 million large items from garden equipment, furniture and flat screen TVs. Construction of the site will generate an additional 3000 jobs. CBRE advised on the lease of both centres.

Menzies said the western Sydney sites can reach most of the country within 12 hours when the new airport at Badgerys Creek opens nearby.

“These new centres will position Amazon for the future to cater for customers who are now ordering larger items online and the bigger sites will allow us to offer speed of delivery and a wider range of goods at our competitive prices,” Menzies said.

The second property, also in Horsley Park, is a fit out of an existing building. The 33,400 square metre site, which will have the capacity to hold up to 600,000 larger items is set to open later this year.

Amazon Australia operations manager Sandra McNeil said the company’s investment in two new facilities in western Sydney “will expand our operational footprint in this area which will provide customers with wider selection and faster delivery”.

An artist’s render of the Amazon Robotics fulfilment centre in Melbourne’s north.

Goodman Australia chief executive Jason Little said the group has invested significantly in the area, and that this development extended “Goodman’s infrastructure spend in the western Sydney employment area to more than $500 million”.

“Most importantly, we’re providing our customer Amazon, with the essential infrastructure it needs to expand and help meet growing consumer needs in western Sydney and beyond,” Little said.

Both of the new fulfilment centres will be equipped with advanced technology to assist Amazon’s team as they pick and pack items, serving Australian shoppers on Amazon.com.au – contributing to the company’s efforts to deliver a smarter, faster and more consistent experience for customers in Sydney around Australia.

Since opening its first Sydney fulfilment centre in Moorebank in 2018, Amazon has invested more than $1.5 billion in western Sydney, additionally opening a robotics fulfilment centre in Kemps Creek in 2022 and a logistics site in Regents Park.

In nearby Lidcombe, the first dual-level logistics industrial development in Sydney’s central west is targeted for completion by the first quarter of next year.

Central by LaSalle and Hale Capital Partners at 42 Boorea Street in Lidcombe provides 40,000 square metres of warehousing and office accommodation across flexible tenancy sizes starting at 6000 square metres.

The development has been designed to meet the diverse needs of occupiers, accommodating both B-Doubles and semi-trailer access. The Colliers team of Trent Gallagher, Michael Crombie and Tony Durante, in-conjunction with Michael O’Neill, Shaun Timbrell and Rajal Chaudhary of CBRE are marketing the leasing campaign.

It comes as 14 of 22 key industrial precincts are in supply deficit nationally, with four broadly balanced and only a few showing signs of oversupply, according to JLL’s Australian Logistics & Industrial Investment Review and Outlook 2024 Report.

JLL’s head of strategic research Australia, Annabel McFarlane, said key industrial precincts, including Melbourne’s south-east, Sydney’s outer south-west and inner west, and Brisbane’s south are in a supply deficit – the latter despite a record amount of space being delivered across Brisbane in 2023.

She said that while there was some risk of oversupply in south Sydney and Melbourne’s north precincts, demand in those areas had accelerated with sites under construction carrying healthy levels of pre-commitment, which would keep the risk of vacancy in check.

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