Orica sells enormous west Melbourne site

The proposed Deer Park industrial estate.

Three years after listing Melbourne’s biggest vacant Commercial 2 zoned site, Orica has sold it to UniSuper for $260 million or $173m after tax.

Orica has sold Stage 1, or nearly half, its 150 hectare Deer Park holding.

A c330,000 square metre industrial park is planned for the 66.96 hectare Deer Park block, to be held in a GPT managed mandate.

HB+B Property is a development partner, the move coinciding with the Sydney group opening a Melbourne office.

Orica is selling the property in two parts: Stage 1, which just traded, was also marketed as a co-development opportunity.

It will offer a neighbouring 68ha parcel, Stage 2, following a rezoning, remediation and “supportive market conditions”.

Charter Keck Cramer’s Peter Kirkpatrick, Peter Hutchins, Ivan Lamb and Nick Ashton are the explosive provider’s transaction advisers.

Orica has occupied the property since 1847 for specialist chemical, quarrying and storage.

It has been planning the rezoning and sell-down since 2011, not opting for any Commercial 1, which would allow residential (story continues below).

Orica built Australia’s first skyscraper, which recently sold for $155 million.

Supportive market conditions to drive Stage 2 listing

The proposed business park, targeting a 5-star NABERS rating, is expected to carry an end value of over $1 billion – or about a third the value of the mandate it is earmarked for.

“This super prime parcel of industrial land further improves the quality of our diversified unlisted property portfolio and adds to our exposure to the logistics and warehousing sector following on from other recent acquisitions,” UniSuper senior manager, Property, Nick Stephens, said.

Development is expected to take place over a few years. Infrastructure connecting the Stage 1 and 2 parcels will also be built.

Upon completion, UniSuper will hold unlisted property worth c$8b.

Deer Park is 16 kilometres west of Melbourne’s CBD.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.