In 1881, the Fremantle–Guildford railway line railway line was built, which passed through Bayswater and triggered significant development. The original ribbon grants began to be subdivided. The first section to be developed was called Bayswater Estate, which was the land between Drake and Lawrence Streets. It was subdivided into lots in for small farming in 1885. A road was constructed down the middle of it, called Coode Street north of the railway line and King William Street south of the railway line. At this time, market gardens were also popping up in the swampy area near the river. Farms and dairies were built along Coode Street. In , a branch railway line was built to the river bank near where the Eric Singleton Bird Sanctuary currently is. The intention of the branch was for it to be the start of a railway to Busselton, however this did not eventuate. Instead, a footbridge was built across the river a year later, linking Bayswater to Ascot Racecourse, and a station called Whatley siding was built on the line. In 1896, Bayswater railway station was built, and in 1897, the spur line was extended to Ascot Racecourse, becoming the Belmont spur line. Bayswater's first industrial buildings were built near the spur line.