A local developer is paying $11 million for a 5.4 hectare industrial site in Melbourne’s west.
The Laverton North property at 2-8 James Street formerly contained an office-warehouse occupied by Hexion Chemicals but was offered as a cleared and clean block of land.
The campaign promoted the potential for the parcel to be split into eight lots measuring between 3520 square metres and 8760 sqm.
Instead, the incoming purchaser plans to replace the site with a business park containing warehouses ranging in size between 1000 sqm and 5000 sqm.
The Industrial 2 zoned land has more than 400 metres of frontage to Cherry Lane and is one street back from the Princes Freeway.
Laverton North is about 18 kilometres from the CBD.
Mr Davy said that the sale campaign attracted a number of developers and institutions.
“Infill opportunities like this rarely come along,” Mr Davy said. “There was, and still is, huge demand for sites like this in Melbourne’s west”.
Mr Davy added that the proposed business park will be a developed on a speculative basis.
“There is a current undersupply of zoned industrial land opportunities in the west,” Mr Davy said, “This was a very smart buy for the successful purchaser”.
Melbourne’s western suburb industrial market is unique in that the land and property is amongst the cheapest in the country to buy or rent.
For many occupiers, especially in the logistics sector, the west – covering suburbs between Melbourne Airport and the Port of Melbourne – is also more convenient to conduct business compared to the city’s (more expensive) north, east and south-east industrial precincts.
A recent Knight Frank industrial report said there are a number of speculative developments in the pipeline around Melbourne, particularly in the west, where, it said, sites are more readily available.
“About 95,000 sqm of speculative development is estimated to hit the market by the second half of 2019 and we anticipate this stock will be well received by the market,” the report said.
“There is also 200,000 sqm of pre lease enquiries in the west currently in the market being heavily contested and looking likely to being completed in the second half of 2019.”
Last October, we reported that sheet metal producer Design Group Limited paid $6.8 million for a 4800 sqm warehouse on a 5212 sqm block at 107-109 Cherry Lane, Laverton North.
Listed agricultural company Wingara Ag Limited also paid $15.1 million for a Laverton North industrial property occupied by Austco Polar Cold Storage, a company it bought last year. These neighbouring sites, 6-10 Pipe Road and 5-17 Leslie Road, cover a three hectare area.
Last year, Pelligra Group acquired Braybrook’s former Huntsman Chemicals site at 454-460 Somerville Road (pictured, below). This 39 hectare parcel is also mooted to be replaced with a business park.
Braybrook is about 10 kilometres west of the Melbourne CBD.