Perth-based fund manager Mair Property Funds has entered into agreements to acquire two commercial properties in Melbourne for $20.3 million in two off-market deals.
The properties, located in Ravenhall and Altona North in Melbourne’s west, will form part of Mair’s Diversified Property Trust.
The Ravenhall property, in the Orbis Business Park, is a modern industrial facility constructed in 2010 and located 22km west of Melbourne CBD with a land area of 13,930m2. The 6,888m2 building is occupied with a 15-year lease until 2031.
The Altona North property is an industrial warehouse built in 2008 and located 13km south west of Melbourne CBD with a land area of 18,410m2. The 10,056m2 building is occupied with a recently agreed eight-year lease that expires in 2025.
Peter Melling, Acquisitions Manager, Mair Property Funds said the two assets were identified for their favourable locations and strong lease agreements.
“Altona is becoming an increasingly important logistics hub due to its proximity to the Melbourne Port and access to the Princess Freeway and Western Ring Road,” said Melling.
“Similarly, Ravenhall is a rapidly growing suburb part of the West Growth Corridor Plan, where the population is expected to increase from 210,000 in 2016 to 377,000 people.”
Upon completion of the acquisition, the properties will be included in MPF’s Diversified Property Trust, which already holds four commercial assets in three states, including a retail premise in Maraoochydore, Queensland; a medical facility in Ellenbrook, Western Australia; an industrial premise in Henderson, Western Australia; and a retail industrial premise in Lynbrook, Victoria.
Wimmera grain growers are set to benefit from the development of new industrial lots at the Wimmera Intermodal Freight Terminal site in Victoria, following the announcement of $1.25 million in funding from the Andrews Labor Government for Stage One of its construction.
“The Wimmera Intermodal Freight Terminal is located on the national rail freight network and further investment at this precinct will create better connections from paddock to port,” said Minister for Agriculture Jaala Pulford.
Industrial lots with bitumen road access, street lighting and other amenities will be established on the 100-hectare precinct, for agribusinesses and food and fibre processors establishing operations at the precinct.
The Wimmera is one of Victoria’s largest dryland farming regions and the Wimmera Intermodal Freight Terminal is a key export hub for local grain producers.
“By investing in the best infrastructure, we are helping grain growers get more produce from paddock to port more efficiently – that’s good news for growers and Victoria’s booming exports,” Pulford added.
“Supporting Victoria’s agriculture sector by investing in key infrastructure is a priority for the Government.”
The $2.5 million development will be delivered by Horsham Rural City Council, with support from the Labor Government.
Stockland has secured a major blue chip tenant for part of its 11-hectare industrial business park in Warwick Farm, with the remainder of the property set to be speculatively developed to meet leasing demand for opportunities in close proximity to the M5 and M7 orbital.
Daikin Australia has signed a 10 year lease 33,278sqm of Gross Lettable Area, at 200 Governor Macquarie Drive, with occupation set for early 2018.
Darren Curry, director of industrial and business services at Savills Australia said Daikin Australia plans to use the Stockland development to cater for the expansion of their current site, located at 62-66 Governor Macquarie Drive. The new lease will cater for predominately office, warehousing and the wholesaling of Daikin products to trade services.
Stockland purchased the property from the Australian Turf Club in 2013, it being originally used as a horse training facility known as ‘Coopers Paddock’. 200 Macquarie Drive is opposite the new Inglis thoroughbred horse stables and sale yard, who will relocate from their Randwick stables to Warwick Farm. In addition, Inglis is developing a conference centre and hotel that will be run by the Sofitel MGallery. Brisbane industrial land supply dries up in the south west
The prime south west corridor in Brisbane is experiencing shortage of large lot land supply, particularly for sites larger than 5ha and those with immediate access to the Logan, Ipswich and Gateway / M1 Motorways.
“We are now heading into single digit opportunities of available large lot land sites to develop,” said Matthew Frazer-Ryan, national director of industrial at Colliers International.
“This is leading to the increase in land values and driving occupier requirements further south to Yatala or further west to Ipswich, which is helping grow and develop these districts.”
According to Colliers International research, Brisbane industrial land values for 2.5ha serviced land lots have increased on average 16% over the last financial year, from $253/sqm in 2015/16 to $294/sqm in 2016/17.
Mr Frazer-Ryan added: “Occupiers and developers in these precincts are now planning up to ten years ahead and looking for sites to build on that are situated adjacent to existing transport nodes or future road network upgrades.
“They are land-banking to secure their future industrial footprint. Some of these occupiers who have less flexibility in choosing a location are also now starting to look at brownfield sites that provide short to medium term income, and that can become available for future redevelopment in lieu of the traditional land-bank strategy.
“Limited stock of quality warehousing facilities has meant that on the leasing front we are experiencing a flight to quality, with occupiers moving from older and less efficient facilities into modern A Grade facilities.
“Additionally, tenants are taking up space in the brand new spec developments providing easy access to major road networks and associated infrastructure.
“Considering existing A Grade facilities are tightly held in this precinct, the demand for design and construct product will increase, ensuring those developers that have landbanks leverage this benefit in the foreseeable future.
“Demand and take-up in the South and Logan Motorway corridor has been more subdued YTD, however ongoing negotiations for a series of new commitments are forecast to be completed in the coming quarter, and rebalance the take up across the southern market.”
Overall, the industrial market in Brisbane has experienced significant leasing activity in the first half of this year, particularly within the TradeCoast region with Colliers International research showing over 100,000sqm of leasing transactions (for warehouses 5,000sqm and above for YTD 2017) occurring.
Research shows prime grade net face rents in the Australia TradeCoast precinct increasing 3.11% over the YoY to June 2017.
Driving growth for industrial product in the Australia TradeCoast precinct is the significant investment in infrastructure projects underway including the duplication of the runway at Brisbane Airport and the upgrading of Kingsford Smith Drive, which will help improve the productivity of the region.
Rockwell Automation has appointed Scott Wooldridge as Managing Director for Australia and New Zealand.
In the role, Wooldridge will oversee sales and business operations in Australia and New Zealand and be responsible for the company’s Growth and Performance Strategy, involving the overarching responsibility for people and strategy in relation to sales, service, delivery, projects and customer care.
“I’m looking forward to working closely with our key distributors, system integrators, end users and OEMs to make sure they continue to be well supported with industry leading power, automation and data management solutions and services,” said Wooldridge. “These Rockwell Automation solutions provide key competitive advantages for our PartnerNetwork organisations, enabling them to be market leading entities in their own right.”
Wooldridge has attained engineering and sales experience in the automation and energy industries both within Australia and the United States. Most recently, the CEO officer of the ASX listed company, Energy Action.
“A key strength of Rockwell Automation is that it is the largest company dedicated to industrial automation, it lives and breathes automation,” said Wooldridge. “I’m looking forward to contributing to its future and helping our customers meet their operational and business objectives in the long term.”
On 16 June, construction began on the Avalon Airport industrial precinct, which will create 750 new jobs, and house a purpose-built state-of-the-art distribution centre for the Cotton On Group.
The industrial precinct has been designed to help Avalon diversify its operations and cement its future as a major freight and logistics hub capable of servicing a variety of industry sectors.
The Andrews Labor Government is backing the project with a $1.5 million investment from the Regional Jobs and Infrastructure Fund to help create jobs and boost the local economy.
The investment from the Labor Government will assist with the development of an initial 40-hectare site on the vacant north-west corner of the 340-hectare industrial precinct. The funds will make the precinct ready for tenants including the site fit-out of voltage electricity, gas, water, fibre optics and communications infrastructure.
The Cotton On Group is the first major tenant for the industrial precinct, and its new 35,000m² facility will enable the retailer to service its 747 Australian stores and e-commerce platform with faster replenishment and delivery times for local customers.
“Today’s commencement of building works at Avalon’s new Industrial Precinct strengthens the Airport’s future as a key Victorian freight and logistics hub,” said David Fox, Executive Chairman, Avalon Airport.
Michael Hardwick, Chief Financial Officer, Cotton On Group, added, “As a born-and-bred Geelong retailer, we are continually looking for ways to drive economic development in the community, and we’re proud to be the first major tenant at Avalon Airport’s new industrial precinct.
“Today marks an exciting milestone for the Cotton On Group as we break ground on our new distribution centre and we look forward to providing our team with a leading experience and world-class working environment.”
Silk Contract Logistics has secured a six-year lease on a 20,337m2 warehouse and office facility at Frasers Property Australia’s West Park Industrial Estate in Derrimut, Victoria.
The warehouse features LED lighting, pallet racking, drive-around B-double access, eight recessed docks and four loading bays, The Australian Financial Review (AFR) reports.
The logistics company will service two new food manufacturing customers at the site, and its neighbours will include Australia Post, CEVA Logistics and Austrans.
“The Melbourne industrial leasing market for quality assets is robust, particularly for enquiries from logistics and manufacturing companies,” said Chamoun Malki, General Manager – Investment Property, Frasers.
Industrial property continues to be in high demand in the transport and logistics industry.
According to Fairfax, various multi-million projects are currently underway in both Sydney and Melbourne, with a $169.3 million sale to Frasers Logistics & Industrial Trust the most recent example.
The sale, which Frasers referred to as a ‘restocking’, covers a diversified portfolio of seven major industrial assets, spread across the eastern seaboard.
According to Fairfax, it comprises four completed properties and three properties under development, has a weighted average lease expiry of 9.6 years and all properties are fully leased or pre-committed.
“Twenty per cent of the assets are in Sydney, 60 per cent in Melbourne and the remainder in Brisbane,” Fairfax reported.
Meanwhile, Stockland started work on a $80 million office and warehouse estate in Warwick Farm, close to the Hume Highway, M5 and M7 motorways and near the Southern Sydney Freight Line and future Badgerys Creek Airport.
The company had only recently redeveloped two warehouse facilities in Melbourne to turn them into a ‘logistics offering’.
Fairfax quoted Michael Fenton, the Australian head of JLL, an American professional services and investment management company specializing in real estate, as saying that the markets continues to set new records every year.
2016 volumes reportedly reached $6.89 billion, surpassing last year’s all-time high. Portfolio transaction volumes have grown 155 per cent per annum since 2013, Fairfax noted.
“Sydney and Melbourne will still be considered as high-growth markets, however pricing will be accordingly sharp,” Fenton told Fairfax.
“In these markets, secondary yield compression hasn’t occurred to the same intensity as that in the prime over the past few years. As such, some assets will have a greater margin to absorb further rises in bond rates. JLL believes yield spreads in Sydney and Melbourne will narrow in the near term.”
Brisbane Airport Corporation (BAC) will deliver a new 11,260m² facility at its Airport Industrial Park precinct for wholesale food distributor Quality Food Services.
BAC’s property division, BNE Property, will deliver the purpose-built office, warehouse, cold storage and distribution facility, scheduled for completion in March 2018.
John Tormey General Manager of Commercial Businesses, BAC, said the deal is a great win for the growing Airport Industrial Park.
“For Airport Industrial Park to attract a new tenant of this calibre in a competitive market demonstrates its strength as an industrial location,” Tormey said.
“Quality Food Services will join more than 400 other non-aviation commercial and industrial businesses that benefit from the airport’s accessibility, size and amenity.”
“Our vacancy rate across both industrial and commercial space remains amongst the lowest in Australia.
“This new development is not only a reflection of Airport Industrial Park’s location and amenity, but also our ability to deliver flexible solutions to meet our clients’ needs.
“We are very pleased to have Quality Food Services on-board at Airport Industrial Park and look forward to working with them on their new facility.”
Frank De Pasquale, Director, Quality Food Services, said Brisbane Airport was an ideal location for the company’s new headquarters.
“The airport precinct has excellent connectivity to road networks and tunnels in all directions which was important to Quality Food Services,” De Pasquale said.
“Combined with the land availability, development flexibility, future expansion options and nearby amenities, this location offered everything we were looking for.”
The completion of stage one of Moorebank Intermodal and commencement of stage two is likely to help land value growth rates in Outer West and South West Sydney over the next 12 months, according to Colliers International’s recent report – Sydney’s second airport: The catalytic effect of transport infrastructure.
Over the previous 12 months land values in the Outer West and the South West sub markets have increased by 24 per cent and 21 per cent, respectively.
Other factors set to help maintain double-digit growth over the coming year include developments under the Western Sydney Infrastructure Plan and the continuing shift of industrial users to the west of Sydney. Relocation is proving popular due to relatively cheaper land values and rents, larger sites with custom-built facilities and stronger infrastructure links with new facilities coming soon.
“Industrial land values across the Sydney market have recorded positive annual growth over the past few years, and have entered double-digit growth since March 2014,” said Sass J-Baleh, Manager – Research, Colliers International in the report. “More recently, land values have soared, with annual growth rates in the high 20 per cent since the end of 2015. Record growth rates are expected to continue across all of Sydney’s sub markets. However, there are different fundamental drivers for this growth between the inner sub markets and the outer submarkets.”
Growth in the inner sub markets was found to be driven by stock scarcity due to rezoning, a situation that is not expected to reverse as land previously zoned as ‘industrial’ is being developed into residential infrastructure including dwellings, roadways and train stations.
On Tuesday 11 April Wade Noonan, Minister for Industry and Employment, officially opened Drystone Estate – a 95-hectare industrial precinct that supports the likes of Target, Woolworths, The Reject Shop, Laverton Cold Storage, Rand Transport and Couriers Please.
The site is located 20km from Melbourne’s CBD, and sits close to the Western Ring Road, the West Gate Freeway and the Princes Highway.
The Victorian supply chain and logistics sector is worth $21 billion to the state’s economy each year – or seven per cent of the state’s Gross State Product – and employs 260,000 people state wide. The industrial estate is expected to create jobs for 1,200 people.
“Melbourne is the city of choice for major logistics and supply chain companies to do business,” said Noonan.
“This massive precinct will accommodate some of the biggest names in retail, and create more than a thousand jobs – which is great news for the city’s west.”