Bullsbrook hub ties up the north

Business News

15th February 2016.

A SUBSIDIARY of global banking giant Goldman Sachs is backing a local private equity player to develop a freight hub near Bullsbrook, in anticipation of increased freight movements connected with the state government's Northlink WA project.

The privately developed hub, to be known as the Northern Gateway, is being advanced by Sirona Capital, which is additionally involved in the Kings Square property development in Fremantle.

Sirona has secured a 200-hectare site nestled between Great Northern Highway and the planned Northlink WA route and hopes to make it a key part of the state's future intermodal freight operations.

Bolstering its case, Goldman subsidiary Austreo Property Ventures is kicking in $45 million through a direct private investment.

It's an ambitious project that would become the Forrestfield-Kewdale intermodal hub if completed.

Sirona co-managing director Kelvin Flynn said the site had been chosen because about two thirds of the state's 21 million tonne annual freight task movements through the north-south corridor.

"The development of industrial land has been very south-centric, yet the state's rapid development in the last decade, really in the last 30 years, ironically has been in the northern corridor," he said.

"The closer you are to your logistics chain in the market, the better. "If you're looking to distribute regionally to the north, there's a saving (using Bullsbrook)." February 15,2016

Similarly, distribution in the north metropolitan area would be cheaper, Mr Flynn added.

Some established companies had expressed interest in moving their distribution centres to the site, he said, while new players could also set up shop.

"With the new economy of ... internet shopping, there is an ever-growing need for the distribution of parcels in the most efficient way and we think we're ideally located to lever off that," Mr Flynn said.

"And more importantly, provide a solution for industry."

Sirona co-managing director Matthew McNeilly said the firm would initially develop the project itself, although there could be opportunities for developers to come in and co-locate.

"Northlink WA comes into being in late 2019," he said. "We're readying ourselves for that eventuality."

The necessary investment in the Northern Gateway would be about $1 billion over a 10 to 15-year period.

Westward of the firm's land holding, the state government has designated a future Bullsbrook intermodal terminal, with the Midland-Geraldton railway line splitting the two.

Sirona is planning a isoha related further development north in Muchea, where it is proposing a heavy vehicle services hub. That part of the project was the closest to starting, Mr McNeilly said.

Players

A number of freight players have been expanding landholdings, with CTI Logistics increasing its property in the current growth zone of Hazelmere with a 30,000-square metre purchase last year.

Linfox has bought i6ha for a planned freight forwarding facility in North Bullsbrook, while K&S Corporation bought I5ha in Bullsbrook in 2013.

The company received approval for the development in the 2015 financial year, which is for its subsidiary Regal Transport.

Freight & Logistics Council of Western Australia executive officer Mark Brownell said the Sirona project was the only development of that sort in the corridor, however.

He said it would serve a real need, particularly for freight movements into Perth's coastal north-west and the north-east, neither of which were serviced by rail lines.

An additional benefit would be that it could cater to overflow from Kewdales existing terminal.

More broadly, Mr Brownell said, the government's Northlink WA policy had been well received, with the masses of project cargo moving through the area benefiting from a dedicated thoroughfare.

It would additionally mean a streamlining of freight that currently goes through the Swan Valley, where local residents have complained about truck movements for some years.

The $1.1 billion Northlink project is planned for completion in 2019, with the state government recently awarding a $281 million contract for the first stage, grade separations on Tonkin Highway, to John Holland.