Developers eye Western Sydney Airport opportunities

Property developers are gearing up for opportunities around the proposed $5.3bn second airport for Sydney.

The site of Western Sydney Airport at Badgerys Creek.

Property developers are gearing up for opportunities around the proposed $5.3 billion second airport for Sydney, with major listed and private companies angling for big parcels around the transport hub.

Global property group Goodman Group chief executive Greg Goodman said there would be development opportunities over time around the proposed Badgerys Creek airport, in line with a global trend towards land use intensification due to increased consumerism and online commerce.

“There will be opportunities round there (Badgerys Creek), no doubt about it, but it will take time,” Mr Goodman told The Australian.

“You’ll find that the good sites around Sydney and Melbourne, in particular, there’ll be more intensification of the land use. I think that will be something that will happen in all locations around the world, which is good if you own a lot of land in those locations.”

More intense land use would make the land more valuable, which was likely to drive rents strongly over the next four or five years.

Property tycoon Lang Walker is focused on the $2.4bn Parramatta Square development but said Badgerys Creek would be a driver of growth for western Sydney.

“I am sure there are opportunities there over the next few years. The airport is going to bring a heck of lot of jobs and creation of industries and the like, with some of those to be based around the airport,” Mr Walker said.

Frasers Property Australia chief executive Rod Fehring said the developer would like to be involved in the Badgerys Creek project but uncertainty on infrastructure costs was a sticking point, at least for now.

“Clearly there are opportunities there, no question about that, and we would like to participate in realising some of those,” Mr Fehring told The Australian. “But, here comes the but … the talking up of Badgerys Creek international airport has meant prices for land are very high.”

The area was largely unserviced rural or rural residential land with fragmented ownership, and the cost of adding roads, public transport and sewerage infrastructure was not yet clear, he said.

The Australian is aware of land parcels that have doubled in value as developers jostle for position ahead of formal announcements about the airport’s land usage plans.

“What’s it going to cost for services in the area, and how do we get that to flow back to landowner expectations for what the property is worth — and do all of that while still making it viable to do development?

“That’s the equation we’re pondering at the moment and we can’t make it stack up,” Mr Fehring said.

Russell McKinnon of business management consultants Urbis said that likely landowners were waiting for the structure plan for the area to be developed.