Former Abbotsford biscuit factory could fetch up to $35m

Australia Post currently uses the two-level building for its parcel and mail handling operations.

The 8000-square-metre building has now been listed for sale by Lascorp and Herzog Group.

CBRE national director of investments Mark Wizel, who is marketing property, would not be drawn on price expectations but industry sources believe the asset could fetch as much as $35 million or more.

Mr Wizel said recent high profile sales, including a Woolworths distribution facility for $91 million and a HP site on the Burwood Highway, indicate there would be strong interest in this site.

“We expect a strong market reaction from investor/developers particularly those who had expressed interest in several similar properties over the last 12 months, including the sale of a Woolworths-tenanted property in Mulgrave and a Hewlett Packard site in Forest Hill,” Wizel said.

“Both properties were purchased for the huge potential they offered as landbank opportunities in a market characterised by a limited supply of development sites and, of course, the ongoing demand for medium-density housing, which is not going to change any time soon.

“By contrast, Abbotsford offers a much more central location driving a far greater level of demand for properties of all types. This is undoubtedly a landbanker’s dream.”

The sawtooth-design warehouse, which sits on a near-10,000-square-metre industrial-zoned site, was originally constructed and occupied by Weston’s Biscuit Factory in the 1950s, and the Australian company remained there until the early 2000s.

It was converted into a two-level office and industrial facility in 2009, and more than half of the site was recently converted for Australia Post.

CBRE’s Josh Rutnam said the sale offered a secure, blue-chip investment opportunity with significant growth potential to be redeveloped into a mixed-use precinct.

“The asset offers massive potential development upside down the track, but passive investors will also be attracted to a property which offers a very secure investment and benefits from a recent partial upgrade to a modern online and delivery facility in a very well located suburb, just two kilometres from the centre of Melbourne,” Mr Rutnam said.

“Melbourne’s recent and continuing population growth has driven the so-called gentrification of many of the city’s former industrial inner suburbs and Abbotsford is now, more than ever, firmly in the spotlight. As such, Grosvenor Street offers an exceptional opportunity from both an investment and development perspective.”