To take advantage of the demand, a new site has been bought to market at 191 Miller Street, Chester Hill, which sits on 65,430 square metres with three buildings. No price was disclosed, but similar assets have been sold for upwards of $26.5 million.

Ray White Commercial NSW is advising on the property through director Michael Ajaka, NSW managing director and partner, Jeff Moxham and Stephen Moses.

Demand for large distribution centres is rising, with groups ranging from online retailers, such as Amazon, to third-party logistics, such as DHL, to the supermarkets of Woolworths and Coles, among others.

Given the vast distances between towns and cities in Australia, warehouses are needed in more areas than in a small country such as Britain, to ensure goods arrive within the promised 24 hours.

As a result, investors are looking at sites near transport and Sydney's west is the prime target.

"We have not seen such a massive landholding come to market in recent times, boasting a 144.7-metre frontage. The property also offers a strong tenant profile returning about $1.899 million in gross passing income and weighted average lease expiry of 4.89 years," Mr Ajaka said.

"The property is a mix of older style and more modern industrial buildings with office facilities. It also offers easy truck and container access with high-clearance buildings, truck weighbridge, hardstand areas, container storage and an industrial waste recycling facility."

Industrial vacancies have been contracting across Sydney, which has stimulated increases in investment demand; however the more established central south-west region is often forgotten, according to Ray White Commercial research.

Head of research Vanessa Rader says the market extending from Enfield to Moorebank, taking into account regions such as Milperra, Villawood and Chullora in recent years, has been contracting due to competition from other uses such as retail and residential, resulting in increases in land value but dampening sales turnover levels.

"These markets contain a high volume of older-style stock, which has witnessed improved tenant demand increasing average face rents by 3.52 per cent over the last year.  This location is home to manufacturing, fabrication and wholesale-type uses which generate strong local employment."

Ms Rader said larger institutionally owned distribution facilities continue to favour the outer west and outer south-west regions due to their affordable, larger land parcels allowing for purpose built-facilities along the major motorways.

Mr Moxham said local investors have continued the trend of looking towards commercial and industrial assets to diversify investments during  this time of low residential yields, volatility surrounding the sharemarket and affordable finance.

"The outer industrial regions have been highly sought after by institutional players, lowering yields to now average 6.25 per cent to 6.75 per cent, keeping smaller local buyers out.

" Attention has now been drawn to these more established locations offering a more affordable yield combined with longer term potential," Mr Moxham said.

Brad Lord, director of asset services from Ray White Commercial NSW's newly opened Parramatta office, also said markets such as the central south-west still show some signs of affordability for tenants and  investors, with good access to heavy rail nodes and passenger rail as well as the M5 and M4 motorways.