Jreissati family cash in as winemaker's warehouse sells for $81m
The Jreissati family has owned the building since 2014.

Jreissati family cash in as winemaker's warehouse sells for $81m

The wealthy Jreissati family has cashed in on the industrial property boom, selling a prime Port Melbourne winemakers warehouse for $81.6 million.

German-based fund manager Institutional Investment Partners has snapped up the Jreissati’s 1.69-hectare property at 262 Lorimer Street, in the inner-city industrial hub next to the Yarra River.

Port Melbourne’s industrial quarters have undergone a radical transformation in the past decade, with large sections of land rezoned in Fishermans Bend to allow for residential development.

The diminishing size of remaining industrial-zoned parcels and their strategic location next to the city and its main port is putting pressure on prices.

That, combined with the flood of money flowing into the industrial sector following Australia’s e-commerce boom, prompted the property’s selling agents to call the price paid by IIP “the sharpest result for a single asset in Victoria from an industrial perspective”.

The German fund manager placed a caveat on the title after striking a deal on a yield of 3.6 per cent, setting a new benchmark for the sector.

Average yields for industrial properties on Melbourne’s fringe are around 4.6 per cent, a significant change from five years ago when yields were between 6 and 7 per cent.

Self-made developer Elias Jreissati controls Benson Property Group and the top-tier Yarra Valley winery Levantine Hill.

Other members of the Jreissati family have owned the building since 2014, when they purchased it off the Rathbone Wine Group for $31 million under a leaseback arrangement.

The family-run Rathbone Group, which owns the well-known wine brands Yering Station, Xanadu and Mount Langhi Ghiran, recently signed a 13-year lease extension, increasing the site’s appeal to investors and prompting the Jreissatis to sell.

The off-market transaction was brokered by Dawkins Occhiuto director Chris Jones.

Mr Jones said four other groups were in the running to buy the property at yields below 4 per cent. It was “very much a trophy asset in a tightly held market,” he said.

Nearby is the government-sponsored Fishermans Bend innovation precinct on the $180 million former General Motors Holden site which is being redeveloped into a technology hub and a new campus for Melbourne University’s faculty of engineering and information technology.

The building’s 5246 square metres of gross leasing area includes a temperature-controlled warehouse and distribution facility, a four-level office, ground-level cafe and a multi-storey car park.

It provides annual returns of $3 million with fixed yearly increases of 2.75 per cent.

Part of that income is provided by the CFMEU’s training unit, which leases the second floor of the office looking out across the Yarra.

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