Frasers Property Australia has divested two Melbourne office-warehouse properties in separate deals totalling $26.275 million.
An office and warehouse facility on Scanlon Drive in Epping in Melbourne’s north sold to a private investor for $15.7 million on a yield of 6.2 per cent.
The second asset, an office-warehouse facility at 1 West Park Drive in Derrimut, in the city’s south-west, sold for $10.575 million to the ASX-listed Industria REIT on a yield of 6.6 per cent.
JLL’s Tony Iuliano, Adrian Rowse and Brad Esler were appointed to broker the properties either separately or in one line.
Mr Iuliano said the portfolio had attracted interest from on-shore and off-shore investors.
“The interest reflects the continued unprecedented demand in Melbourne’s industrial and logistics sector from both investors and occupiers in recent years, driven by strong economic and population growth,” he said.
The Epping property is leased by Criterion Industries, which began a six-year tenancy on the 24,300 square metre site in May this year and holds two four-year options.
The site is close to the Melbourne Fruit and Vegetable Market and is expected to benefit from a major upgrade to the CityLink Tullamarine Freeway now under way.
On the other side of the city, Downer Utilities Australia occupies the 21,580 square metre Derrimut site with a remaining 4.8-year lease term, with one five-year option.
The property is in the West Park Industrial Estate, 18 kilometres from the Melbourne CBD.
“The acquisition is consistent with our strategy of owning high-quality real estate, that is well located and offers an affordable proposition to Industria’s clients,” Industria REIT’s fund manager, Alex Abell, said last week.
Mr Iuliano said the investments were surplus to the core business requirements of Frasers.
“Both sites are modern and leased to national tenants with fixed rental growth of 3 per cent per annum,” he said.
“They have excellent connectivity to road infrastructure, Melbourne Airport and the Port of Melbourne.”
As Frasers unloads assets in Melbourne, it has been adding to its industrial land bank in Sydney, with two acquisitions in April of prime development sites at Eastern Creek.