A land rich Dandenong South industrial investment has sold for c$20 million reflecting a 3.25 per cent yield.
Despite its development upside – the 3.46 hectare property will become vacant in two years – 96-126 Ordish Road is trading to an occupier in the area.
The asset contains 4500 square metres of warehousing.
Interest associated with the current occupier, Allied Natural Woods, were the vendor.
“The property was offered at a time where the south east market is the most land constrained…in Victoria with very few large vacant sites left to develop,” Colliers’ James Stott, who marketed the asset with Gordon Code and Daniel Telling.
“This land environment makes brownfield opportunities like Ordish Rd extremely appealing to buyers due to the lack of greenfield opportunities coupled with significant demand from corporate and institutional buyers looking to increase their funds under management in this location,” he added.
“Accordingly at the close of campaign, we had 10 offers…that resulted in a record land rate for the precinct at $600 per sqm,” according to the executive.
The deal comes seven months since Centuria paid Cadence $88.8m on a funds through basis for a 4.1ha business park set to contain over 40,000 sqm of product at South Gippsland Highway, in the suburb.
In January, a 3.89ha investment next door to there sold to a Sydney investor for $15.46m at a 5.2pc yield (story continues below).
Investors, tenants now considering neighbouring suburbs
Frasers Property Industrial, Goodman, Pellicano and Salta control almost all of the land in the south east region available for development.
“Our analysis of vacant industrial land shows there is just 125ha of corporate owned and controlled zoned industrial land remaining in the south east market, representing just over two years’ worth of supply,” Mr Stott said.
“These supply constraints have triggered significant focus on growth markets like Cranbourne, Officer and Pakenham that present more opportunities for these groups and are now increasingly being viewed as ‘core industrial locations’ within Melbourne’s south eastern marketplace.
A fortnight ago we reported Salta paid a speculated price of over $170m for a 123ha block at nearby Cranbourne West with plans for a $1.2 billion industrial estate.
Last year ESR picked up a 79ha parcel neighbouring that – presently being marketed as Tullamore Business Park.
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