Joint venture partners Frasers Property Australia (FPA) and ESR are paying Charter Hall $14.5 million for a 4.67 hectare piece of the former Peters ice cream headquarters in Mulgrave.
The deal for 254 Wellington Road only settled recently, but was mooted more than two years ago when FPA applied to replace its holding with a $400 million business park comprising of four offices, containing a total lettable area of about 60,000 square metres, and 2,497 car parks.
That redevelopment proposal has now been approved.
Today, FPA and ESR confirmed they secured Nissan to occupy 63 per cent of one of those buildings, to be known 1/254 Wellington Road.
Due for completion next May, it will rise eight storeys and contain 17,393 square metres of lettable area.
Nissan is renting 10,850 sqm over five levels, configured with a 9000 sqm office, 1850 sqm workshop and 550 car parks.
FPA and ESR have quickly moved to sell 1/254 Wellington Road, appointing agents last month. On a 1.1 hectare block, this investment is expected to trade for in excess $100 million, according to sources.
For Nissan, the lease deal marks the end of an era.
Since 1977, the car maker occupied an 11 hectare office-warehouse at 270-280 Frankston Dandenong Road, Dandenong South – about 20 kilometres further south-east of the Melbourne CBD from Mulgrave.
Nissan sold this Dandenong South headquarters to a local syndicate for $35 million in late 2017 with a leaseback, and after deciding to outsource its warehousing to logistics giant, CEVA.
Peters sold the Mulgrave plant to Charter Hall more than five years ago.
The Peters site contains a distinctive 1960s office with a sinuous roof-line and waffle-style façade which is registered on the Heritage Council of Victoria database and is about to be protected from demolition.
FPA and ESR plan to refurbish the former Peters headquarters and build the new offices around it.
Their redevelopment will also contain a gymnasium, restaurant and activated outdoor space.
“Nissan’s new headquarters will be located within Monash’s National Employment and Innovation Cluster, Melbourne’s largest concentration of employment outside of the CBD,” FPA’s general manager, southern region, Anthony Maugeri said. “We plan to develop a state-of-the-art business park and are eager to deliver industry-leading amenity on the site to assist in attracting large commercial occupiers”.
Phil Pearce, chief executive officer at ESR Australia, added: “this is an exciting project for ESR and Frasers Property as we commence a large-scale business park development in Melbourne’s south-east”.
“We are seeing Mulgrave emerge as a growing suburban commercial office market. Securing a high-quality customer such as Nissan as our first tenant further supports the strategy of investing in and developing market-leading real estate and underlines the favourable outlook for the development in this sought-after location.”
Nissan Australia managing director Stephen Lester said that the car makers current [Dandenong South] “was officially opened in June 1977, so over the 40 plus years that we have based ourselves here it has served us well, but we have grown as a business since then”.
“The new Nissan head office will not only be the national headquarters for the greater Nissan business, but also for our finance arm Nissan Financial Services Australia, our technical trainers and the Victorian state office.
“Enjoying the state-of-the-art facilities that come with a new office will take our business to new heights helping us to better service all of our stakeholders, particularly current and future Nissan owners.”
Colliers International’s Rob Joyes sold 254 Wellington Road to FPA and ESR. CBRE’s Andrew Peak, Gianni Macdonald and Stephen Adgemis negotiated the Nissan lease. Nissan’s new building is earmarked for a site on the corner of Peters Avenue.
FPA and ESR recently completed another office development at nearby 211 Wellington Road, Mulgrave.