Singapore's Straits Trading buys Melbourne industrial estate from ESR
677 Springvale Road is an industrial complex comprising offices and warehouses. Photo: CBRE /Knight Frank

Singapore's Straits Trading buys Melbourne industrial estate from ESR

Singapore’s The Straits Trading Company Limited has beefed up its Australian industrial portfolio after buying an estate in Melbourne’s south east from Asian logistics platform ESR for $24 million.

The seven-building property at 677 Springvale Road in Mulgrave is spread across 2.25 hectares and includes 12,157 square metres of lettable office and industrial space.

The partially let facility sold on a passing yield of 5.4 per cent. Its sale highlights the strong appetite from institutional investors for in-fill industrial facilities offering last-mile delivery solutions.

Full-let, the yield would be in excess of 7 per cent.

The estate serves as the headquarters of engineering consultancy HRL Technology Group, which accounts for 35 per cent of the $1.35 million in current annual rental income. Other tenants include Optus, B.Box and ADB Safegate.

The Straits Trading Company is the publicly listed arm of the Tecity Group, founded by the late banker and philanthropist Dr Tan Chin Tua.

Its board includes prominent Australian businessman Dr Gary Weiss, who last month narrowly lost a vote to be appointed to the board of Cromwell Property Group on behalf of Singapore real estate fund manager ARA.

Explaining its rationale for the acquisition, Straits Trading said it marked the continuing expansion of an Australian portfolio that includes five industrialproperties and a 37,970 square metre parcel of land for mixed-use office and warehouse facility development north of Adelaide, acquired for $7.6 million in September.

Straits Trading primarily invests in real estate, hospitality and resources.

It owns a 89.5 per cent stake in Straits Real Estate, a co-investment vehicle that seeks out real estate related investments and opportunitiesglobally.

It also owns a 20.95 per cent stake in ARA and has a 30 per cent interest in Far East Hospitality Holdings, a developer and operator of hotels.

The vendor of 677 Springvale Road, ESR, acquired the property through its $723 million takeover ASX-listed fund manager Propertylink earlier this year.

It was marketed by Ben Hegerty and Rory Hilton from CBRE and Gab Pascuzzi and Scott Braithwaite from Knight Frank.

In another East Coast industrial deal, the Charter Hall managed Charter Hall Direct Industrial Fund No.4 acquired a 13,000 square metre distribution centre at 58 Precinct Street, Parkinson in Brisbane’s south for $28 million on a yield of 5.4 per cent.

The warehouse was purpose-built in 2014 as a Masters Home Improvement store and recently been repositioned into a distribution centre.

It was acquired via a sale and leaseback transaction and is occupied by ASX listed Beacon Lighting.

Get a weekly roundup of the latest news from Commercial Real Estate, delivered straight to your inbox!

By signing up, you agree to Domain’s Privacy Policy and Conditions of Use. You may opt out at any time.