Consortium pays $17.3m for Ikea warehouse in Abbotsford

An image of 30-36 Grosvenor Street (right), opposite the red-brick warehouse at 45 Grosvenor Street (left) which the same investors bought four months ago.

A consortium of Australian-Chinese investors including Yuan Tao, a former executive with developer Poly Australia, has paid $17.3 million for an industrial asset in Melbourne’s Abbotsford.

The 4616 square metre Industrial 1 zoned site at 30-36 Grosvenor Street, about three kilometres north-east of the CBD, is mooted to make way for an apartment project in the medium term.

It includes a 3600 sqm warehouse, currently tenanted to furniture retailer IKEA, which has a major outlet at the nearby Victoria Gardens Shopping Centre in Richmond.

IKEA pays annual rent of $845,000 to occupy the Abbotsford premises. On that basis, the investment is trading on a 4.88 per cent passing yield.

The acquisition comes four months after the same investors paid $37.3 million for two Industrial zoned neighbouring assets at nearby 45 and 50 Grosvenor Street, Abbotsford, including a low-rise red brick warehouse formerly occupied by Weston’s Biscuits.

These Grosvenor Street sites – on the banks of the Yarra River – are also expected to make way for apartment projects longer term. Offloaded by private investors the Herzog Group and Michael Lasky, 45 Grosvenor Street is part-occupied by Australia Post on a lease expiring in 2028, and Honeywell, on a lease ending in 2021.

CBRE managed both marketing campaigns. Mark Wizel, Lewis Tong, Josh Rutman and Julian White were the brokers.

Poly Australia is, via the Poly Real Estate subsidiary, controlled by the Chinese-government’s China Poly Group Corporation.

The red-brick Austral Silk and Cotton Mills warehouse, built in 1927 in Trenerry Crescent, Abbotsford, will be retained, after selling to the Zagame family earlier this month.

Earlier this month we reported that the Zagame family was paying the Victorian branch of the Australian Education Union $21 million for a historic warehouse on a 4735 sqm site at 112-124 Trenerry Crescent, Abbotsford, a property recently rezoned Commercial 1, which would make it appropriate for a residential redevelopment.

Last October, Peregrine Projects sold the Carlton Brewhouse on a 2291 sqm site at 11-17 South Audley Street, Abbotsford, for a speculated $10 million.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco
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