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Industria REIT buys Epping warehouse for $15.7m

July 13, 2018

The Melbourne Wholesale Fruit Vegetable and Flower Market. Photo: Supplied

MPG Funds Management, which evolved from the McMullin Group, established by the late Ian McMullin who created the Spotless Group from a single drycleaning store in 1946, has sold a major industrial site in Epping, 21 kilometres north of the Melbourne CBD, to Industria REIT for $15.7 million.

The 2.1 hectare parcel at 13 Ricky Way and 10 Jersey Drive, leased as a manufacturing and distribution facility and national head office for Edlyn Foods, includes two stand alone buildings and a small car park.

The site is close to the 70 hectare Melbourne Wholesale Fruit Vegetable and Flower Market which opened three years ago after 10 more than years of planning of five years of construction.

CBRE’s Rory Hilton and Ben Hegertey marketed the site for MPG Funds Management which had attached a book value of $15 million to it. Returning nearly $1.2 million in annual rent, the investment sold on 7.5 per cent yield.

The deal comes a week after it was reported two Dandenong South industrial properties sold to one buyer for $31.7 million (the yield for that portfolio was 6.6 per cent).

Elsewhere in Melbourne, Ascendas REIT Australia recently paid $16.2 million for a 2.6 hectare Scoresby industrial site with a 16,000 sq m office warehouse facility purpose built in 1979 for homewares manufacturer Décor.

Newcrest stays put after accommodation search

Mining giant Newcrest has finished its search for office accommodation back where it started, at 600 St Kilda Road.

One of the world’s biggest gold miners, the company is speculated to have conducted a search capturing Melbourne’s inner southern fringe, including Southbank.

Instead it will re-commit for 5500 square metres of space at the office, on the south-west corner of Lorne Street, which for years was known as Kvaerner House. JLL’s Richard Norman renegotiated the lease for the building owner, a Singaporean investor. Corporate Real Estate Advisory’s Peter Birrell acted for Newcrest.

Apple’s Fed Square timing delayed

Commercial real estate agents might know something the rest of us don’t, regarding the timing of Apple’s proposed and controversial move to Federation Square.

Teska Carson this week listed for lease numerous retail spaces within the square, including two retail shops in the three-level Yarra building, which is earmarked to be demolished and replaced with an Apple store.

The Yarra building leases are the only ones being marketed for a short term (18 months), suggesting construction of the new building could start in 2020.

Apple announced its intention to occupy a store near the banks of the Yarra River last year. Construction was expected to begin in early 2019. The provocative Federation Square was built on the site of the ex-Gas & Fuel Towers, opposite Flinders Street train station, in 2002.

Vision Australia selling up in Kensington

Vision Australia is the latest not-for-profit group to list a commercial property for sale. In Kensington, about 2.5 kilometres north-west of town, the 346-350 Macaulay Road site covers an 8800 sq m block on the north-west corner of Stubbs Street and is set to trade for more than $35 million.

Vision Australia paid $9.2 million in 2008 for the property which includes a 6000 sq m office/warehouse built in 1998 for TNT Logistics.

It is being offered this time around as an investment, returning $684,500 in annual rent. Agency CBRE is also promoting the redevelopment potential of the Mixed Use zoned site. Near the Kensington Village retail strip, and 100 metres from the Macaulay train station, the block could make way for a building rising up to eight storeys.

In May, a 3986 sq m industrial property at nearby 88 Stubbs Street and also with a Mixed Use zoning, was listed for sale as a medium density redevelopment opportunity, by Beller Commercial.

Julian White, Lewis Tong and Mark Wizel are representing Vision Australia.

The listing comes in a year when numerous other not-for-profit groups have sold inner city premises – some electing to rent.

Corplex buys Thomastown site from Bunnings

Industrial construction company Corplex is paying Bunnings $7.1 million for a vacant site in Thomastown, 13 kilometres north of the CBD.

Bunnings offered the 1.5 hectare rectangle shaped block permit-ready for a mixed use development containing a petrol station, retail and office-warehouses. With street frontage to Dunstans Court and busy Dalton Road, the parcel is next door to a large open-air car park servicing the hardware giant’s local outlet.

CBRE’s Daniel Eramo, Dean Hunt, Daniel DeSanctis and Amanda Traficante represented Bunnings in obtaining the permit prior to the campaign starting three months ago.

Two development schemes which reworked buildings that could be built on the Industrial 1 zoned block, were also promoted. The land is near the Metropolitan Ring Road, which is set to be extended beyond Greensborough, in Melbourne’s south-east, as part of the state government’s proposed 26 kilometre North East Link infrastructure initiative.

McNee sells off-market

Local developer Bill McNee has sold a Glen Iris commercial property off-market. The Vicland Property Group director planned to occupy 3 Glenarm Road, which adjoins the Gardiner train station, about 10 kilometres south-east of the CBD.

Instead it is trading to another owner-occupier, which is at yet undisclosed. The asset traded for $5.8 million representing a building rate of $8,078 and land rate of $8,950.

“The location ticked many boxes from an owner-occupier’s perspective, with immediate access to the recently completed train station as well as Monash Freeway,” Colliers International’s Ben Baines, who sold the property, said. “We’ve also seen a real lack of supply of sub-1000 sq m office buildings, particularly in the inner east markets”.

This particular owner-occupier has been seeking an appropriate office for about three years, Mr Baines added. Nearby, a joint venture between VicTrack and DealCorp will see the construction of a new mixed-use development, with 120 flats, to be known as Glenarm Square.

Smedley flipping Greyhound site

Nicholas Smedley is flipping the prominent St Kilda site which until last year accommodated the Greyhound Hotel. The Brighton Road block is expected to sell for about $8 million.

Mr Smedley’s Steller Group paid $7.5 million for the 911 sq m permit-ready site eight months ago. Parts of an existing permit have been reworked, including abandoning proposed car-stacker parking. But as with the 2017 campaign, the proposal will provide for 37 dwellings and two shops.

The former Greyhound Hotel, for years regarded as one of Melbourne’s largest drag venues, occupied a 163 year old building controversially demolished prior to the land being last listed for sale. Savills Julian Heatherich, Jesse Radisich and Benson Zhou are managing the latest campaign.

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