ESR splashes out on huge Coolaroo site

About 55 per cent of the 8.2 hectare block can be developed immediately.

ESR Australia is paying a speculated price of over $45 million for a Coolaroo industrial investment with immediate development upside.

The 8.2 hectare property, 2-50 Glenelg Street, was offloaded by Palla Pharma, which outlaid $8.145m in 2014.

The ASX-listed vendor offered it with a part leaseback, it is paying annual rent of $1.046m for the 17,482 sqm office/warehouse on 3.7ha.

The balance (4.5ha) can make way for more product.

ESR will hold the asset in its Australia Development Partnership (EADP), which is majority controlled by Singapore sovereign wealth fund GIC.

“This new site will provide ESR Australia with the opportunity to develop prime logistics facilities over the near term in a market that is experiencing record levels of tenant demand with a shortage of high quality stock,” the buyer said.

“The property benefits from being strategically situated within close proximity to existing major road infrastructure, offering customers direct connection to [Melbourne Airport] and the CBD,” it added (story continues below).

Based on the passing rent, the asset is speculated to be trading on a sub 2.3 per cent yield.

Colliers’ Gavin Bishop, Sean Thomson, Damian Marinelli and Nick O’Brien represented Palla Pharma.

Earlier this week, we reported that Holman Industries sold a nearby Broadmeadows warehouse to Westbridge with a leaseback.

Also in that suburb, LOGOS, with Ivanhoé Cambridge, recently started replacing an ex-Woolworths distribution centre with a $230m business park.

That 25ha site cost $50.2m from Growthpoint last August, early into the country’s national COVID lockdown, when investor sentiment was low.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of