Insights
Housing builds neighbourhoods. Employment lands keep cities working.
Posted October 14, 2026
- Local government
- State government
We are planning for almost one million additional jobs in Greater Sydney, yet much of the planning conversation focuses on housing.
Housing is essential, but we need more than homes to create a functioning city. We also need places for jobs, freight, services, innovation and production.
While housing has become a planning priority, employment lands are the foundation that allows a growing, changing city to function. Employment lands operate as part of a wider economic system, with different precincts supporting different industries, supply chains and markets. The challenge for employment lands now goes beyond protecting them from residential encroachment to planning for how they can evolve to support more jobs, services and economic activity.
In this article, we look at the role of employment lands (also referred to as industrial lands) and how they are changing. We also look at the current policy context of the Sydney Plan and Industrial Lands Action Plan, and what this means for strategic land use planning. Much of this article draws on our SGS team's experience working with state and local governments nationally on the land use needs of jobs and economic activity. While many examples are from Greater Sydney, many of the same trends and drivers are also experienced in other capital cities and regional cities and have an outsized impact in the regions.
How has employment land supply changed?
In 2025, Greater Sydney had approximately 20,210 hectares (ha) of zoned employment land supply. Over the previous five years, total supply increased by approximately 6,507 ha, an average annual growth rate of 8%. At first glance, this is very positive, as the population grew by 2% per year over the same period.
New employment land in the Western City, especially in the Camden, Liverpool, Blacktown, and Penrith local government areas, primarily drives this employment land growth. Appropriate infrastructure, including roads, drainage, power, water, and sewer, must service this supply to support development and enable businesses to locate there.
Figure 1: Employment lands supply NSW, 2025
Source: NSW Employment Lands Development Monitor, 2025
Where employment lands are located matters
Different types and locations of employment lands play specialised roles. They are not directly interchangeable. A well-distributed network of employment lands gives businesses sites and transport access that support efficient supply chains. It also provides local job opportunities and services aligned with household needs.
The Western City and Central City contain the largest supply of zoned employment land, at around 54% and 26% respectively. While it is often assumed that employment land in Western Sydney can meet the broader needs of Greater Sydney, this is not always the case for some functions.
Figure 2: Proportion of Greater Sydney employment lands in each region, 2025
How employment land is used varies with the attributes in place, including freight efficiency, labour access, customer location, and connections to transport, energy, water, and other infrastructure. Operations like concrete batching and time-sensitive pharmaceuticals, for example, need to be closer to the markets they service.
This type of need is evident in the Southern Enterprise Corridor, which stretches from Sydney Airport and Port Botany north toward Green Square. While the Eastern City holds about 8% of Greater Sydney's employment land, this corridor contributes more than $33 billion a year to the NSW economy. That is about one-third of the economic value of the Sydney CBD to Haymarket ($108.5 billion a year), making it one of the country's most productive economic corridors.
The corridor is home to a diverse mix of industries deeply embedded in place, including freight, logistics, manufacturing, and innovation. A key competitive advantage remains its diverse building types, which have adapted to other uses. It is also under growing pressure from population growth in surrounding suburbs, leisure and recreation uses, demand for data centre land and structural shifts in the economy. This corridor only makes sense when viewed as part of a broader system. If we assessed the precinct in isolation, we would miss its real value. Its strength lies not just in the industries and activities it contains, but in its position in Sydney's economic geography. It links global gateways at the port and airport to innovation districts, including Tech Central, and to the health and education precincts at Randwick. Its value lies in what it produces and how it connects. This corridor cannot simply be accommodated in outer western Sydney.
Figure 3: Southern Enterprise Corridor
Where employment land has changed to other uses
Despite overall growth in Sydney's employment land, some regions have experienced a loss of employment land, mostly to residential uses. We examined changes in employment land over 10 years, from 2016 to 2026. This loss has occurred mostly in the Eastern City, North City, and Central City.
Residential rezoning often puts employment land under pressure, as stakeholders seek land to increase residential density, meet housing targets, or achieve the ‘highest and best use’ of land, arguing that residential values exceed those of employment land. These losses create economic efficiency challenges for business-to-business and business-to-customer transactions. These inefficiencies also show up as higher costs for businesses and consumers, or as broader impacts on the community.
Figure 4: Greater Sydney Employment Lands Change from 2016-2026
Emerging issues and trends
Employment lands are not static. Like centres and residential areas, they have diverse uses, locational needs, and built form, from light and heavy industry and manufacturing to urban services and creative uses. They respond to underlying macroeconomic trends and changing consumer demand for goods and services. Major issues impacting employment lands today include:
Population and housing growth
Increasing residential density means existing employment lands must work harder to support more people while also becoming locations for future jobs. Employment land is also needed to support the construction sector, which delivers more housing, as construction materials will either pass through these employment lands or be produced there.
Online shopping
Online shopping has continued to rise since the pandemic. More online shopping means more parcels moving around our cities and a greater need for logistics spaces and micro-delivery centres to sort, store, and deliver them to our homes.
Data centres
Demand for data centres in NSW is growing, and they are considered critical infrastructure. Data centres are already located and planned in employment precincts, reflecting demand for land near energy infrastructure and end users. They compete with, and often outbid, typical industrial land developers, especially for larger low-density sites [1]. While the NSW Government has shared a framework for data centre investment, the Sydney Plan identifies suitable employment land for data centres as an action for the Department of Planning in 2027. This spatial planning is key to ensuring other valuable economic activities and jobs are not displaced.
Automation
Organisations are increasingly using automation to reduce costs and improve productivity. This is changing building and workforce needs. Advances in automation could restructure some industries, change the size of spaces and land needed to operate, and displace workers through a greater reliance on technology.
Availability of undeveloped and serviced employment land
NSW faces a major challenge with its pipeline of serviced employment land, land with wastewater connections and heavy vehicle access. This is land that can practically accommodate growing demand for industrial uses. In 2025, only around 5% of undeveloped land in Greater Sydney was serviced.
Given the need for sufficient serviced employment land in a growing and changing city, this poses a significant risk. A lack of serviced and undeveloped employment land means NSW may lose investment and job opportunities to other states.
Employment land in regional areas
Employment land in regional areas shows similar trends, but in different social, economic, and environmental contexts than Greater Sydney. Metropolitan areas are often seen as core markets, while regional areas like Wollongong and Newcastle are considered secondary markets. Industrial businesses want to locate in Sydney because it offers better land and infrastructure and is closer to the people and businesses they serve.
For regional areas to compete with Greater Sydney, the costs of transporting goods and accessing skilled labour need to stack up against lower land costs. Environmental conditions and road networks often constrain employment land in regional areas, which may not accommodate some truck movements. Greenhouse gas emissions would also rise if more industrial uses were in the regions, because more regional freight movements would be needed.
What this means for planning
To preserve and keep planning for employment lands that meet future needs, we need to do three things:
1. Plan regionally for freight and logistics
The loss and uneven distribution of employment lands can create supply chain inefficiencies. With employment lands concentrated in the west, goods and containers often move from entry points at the port and airport in eastern Sydney to the west. This adds costs and creates higher environmental impacts. The new Western Sydney Airport, with its 24-hour cargo precinct and extensive warehousing space, will serve an overlapping rather than identical freight function to Port Botany. Helping the freight and logistics industry operate efficiently, limit emissions and reduce costs for customers must be a consideration when planning the future of employment lands in NSW.
2. Plan strategically
With the ongoing contest over land use and the need for housing, population-serving jobs, and open space, pressure remains to convert some of NSW's employment lands to other uses. These decisions need a long-term, strategic, region-wide view, informed by an understanding of the different uses across employment lands. The recently released Sydney Plan and Industrial Lands Action Plan aim to provide a more strategic, coordinated approach to planning, managing, and protecting industrial lands across NSW. A key action is a framework that categorises industrial land as state, regionally or locally significant, based on its contribution to economic activity. This aims to protect the strategic importance of state and regionally significant industrial land. A key challenge is safeguarding against further loss of employment lands close to where people live, which would affect the economy, supply chain efficiency, job opportunities, and places to innovate and create.
3. Enable adaptation
The adaptability of industrial precincts means they tend to support a range of industries. Some are becoming more diverse, with non-traditional uses such as gyms and distilleries. They are also co-locating with emerging sectors such as creative uses and hospitality, including dark kitchens. Retail experiences are also emerging, with distilleries offering hospitality and art studios with small retail spaces.
For NSW, a key consideration is supporting flexibility in industrial areas to accommodate both traditional and emerging businesses, without compromising harder-to-place, lower-density, lower-value uses.
Looking ahead
Employment lands are essential to how our cities and regions function. They provide space for activities that underpin the economy. These places face new pressures and opportunities that will require them to keep adapting and evolving.
In the past, planning has viewed employment lands through the lens of what they could become. Then, the focus shifted to retaining employment lands, as reflected in the Sydney Plan and Industrial Lands Action Plan.
The future challenge is not simply retaining employment lands, but planning for a connected network of precincts that can accommodate changing industries, support productivity and enable Sydney's economic growth. This calls for a focused, strategic approach and recognises the distinct role of employment lands, protects their long-term value, and plans for future jobs and industries in the right locations.
The strength of employment lands lies in their activities, their position in the broader region, and their national and global connections.
Housing creates neighbourhoods. Employment lands help cities function. To build successful cities and regions, we need to plan for both with equal intent and ambition.
This briefing is based on a presentation delivered by Nicole Jelwan, SGS Consultant and Alison Holloway, SGS Principal & Partner, at the PIA NSW State Conference, 25 September 2026. View the slides here.
Sources
[1] The Industrialist, Development-ready land set to run out in 3.2 years: Cushman & Wakefield, 19 August 2026
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