Growthpoint to sell $100m Woolworths distribution centre in Melbourne
Growthpoint Properties Australia has decided to sell the Woolworths’ Mulgrave distribution centre and Victorian head office – an asset worth $100 million or more – as it re-weights its portfolio.
The 68,144-square-metre office and distribution centre on Wellington Road was purpose-built for Woolworths.
The property sits on a 19-hectare infill land holding at Mulgrave, in Melbourne’s south-east.
Growthpoint’s move to sell comes after the property trust set an objective at the start of the 2017 financial year to increase exposure to the office sector and to the NSW and Victorian markets.
The Mulgrave distribution centre sits on 19 hectares. Photo: Supplied
As a result, its exposure to the office sector increased from 56 per cent to 66 per cent.
The reshuffling of the Growthpoint portfolio entailed $729 million in property acquisitions and development deals along with divestments over the 2017 financial year period.
One of its biggest deals was the $142.2 million sale to Mapletree Logistics last December of a portfolio of four industrial properties that Growthpoint originally acquired for $120.1 million.
CBRE and Dawkins Occhiuto have been appointed to broker the Wellington Road property, which has a lease expiry of 3.8 years and annual income of $4.7 million.
“This is one of the biggest sites in Melbourne’s south-east to be offered for sale, offering both an attractive opportunity to capitalise on its current investment profile with an A grade ASX-listed tenant or potentially further develop it for an alternative use in the medium to long term,” CBRE’s Chris O’Brien said.
“The opportunity to secure such a substantial landholding in this tightly held and established inner south-east location is anticipated to attract interest from long-term developers that will look to capitalise on its underlying land value.”
The property includes surplus expansion land of 3.8 hectares and is close to the Monash Freeway, Eastlink and Princes Highway.
Andrew Dawkins, of Dawkins Occhiuto, noted the appeal of the strong tenancy profile.
“The facility forms a key part of Woolworths’ logistics supply chain, operating as its 24/7 distribution centre servicing all Victorian stores,” he said.
There has been considerable action in the market in recent months for Woolworths centres.
In February, industrial investor Logos snapped up a big Woolworths distribution centre in western Sydney’s Minchinbury from Lendlease’s Australian Prime Property Fund for $161 million.
A year ago, Charter Hall struck a $215 million fund-through deal with Woolworths that will result in the development of one of the largest distribution centres of its kind in Australia.
