Pomeroy Pacific acquires strategic Mulgrave site for $30.5 million

Pomeroy Pacific is spending $30.5 million on this industrial site which has residential redevelopment upside.

Pomeroy Pacific is spending $30.5 million on an industrial investment with development upside in Melbourne’s Mulgrave.

The deal – negotiated by CBRE’s Sasan Misaghian, David Aiello and Ben Hegerty – sets a record rate for industrial zoned land in the Monash precinct.

It also reflects a substantial capital gain for the vendor which acquired it for $15.5 million 18 months ago.

The 4.1 hectare holding at 508-520 Wellington Road (pictured top and left) adjoins the Woolworths Victorian head office and distribution facility which local investor Harry Stamoulis bought for $91 million last year.

“Both properties offered longer-term development potential, which had contributed to the strong pricing result,” Mr Misaghian said. “There is a shortage of available industrial land in Melbourne’s Monash precinct, which has created opportunities for developers to landbank larger sites which offer existing income.”

“Both sites are surrounded by established residential – suggesting a higher and better use in the future subject to the relevant planning controls”.

The 508-520 Wellington Road property adds to a portfolio of more than 40 developments Pomeroy Pacific manages. Its project pipeline – worth more than $1 billion – includes medium to high density residential projects, retail centres, hotels, industrial projects and land subdivisions.

Pomeroy Pacific chief operating officer Talis Sterns.

Pomeroy’s chief operating officer Talis Sterns said “our experience in industrial development spans almost 50 years and includes hundreds of buildings. This recent acquisition is timely and well-conceived to meet industrial demand”.

Mulgrave is about 21 kilometres south-east of the Melbourne CBD.

“The sale presented a unique opportunity to acquire a rare infill site in Melbourne’s tightly held and densely populated suburb of Mulgrave,” Mr Aiello said.

“The campaign generated interest from owner occupiers, developers and investors given the potential rezoning upside coupled with the existing lease to Renold Australia, a subsidiary of one of the world’s largest suppliers of industrial chain and mechanical power transmission products”.

Renold’s head office, factory and distribution centre includes 8049 sqm of building area and 18,000 sqm of surplus land at the rear.

It pays $960,990 to occupy 508-520 Wellington Road. On that basis, Pomeroy is acquiring the asset on a tight 3.15 per cent yield.

Earlier this year Pomeroy, with joint venture partner Little Projects, acquired a 28-hectare industrial site in Cranbourne West.

Pomeroy also controls an industrial property adjacent to an Eastlink onramp, at the corner of Greens Road and Logis Boulevard, in Dandenong South, with Nigel Hunt’s McLaren Group. This site is making way for a mixed-use development comprising 18 warehouses, a United Petroleum service station, showrooms, supermarket, retail – and 2500 sqm of offices.

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Marc Pallisco

A freelance property writer and experienced analyst, Marc is the co-founder of realestatesource.com.au