Woolworths assigns lease of redundant Home Timber & Hardware distribution centre

Woolworths has assigned the lease of a modern logistics factory in Melbourne – no longer required since the 2016 sale of its Home Timber & Hardware division to Metcash.

Two tenants – JTC and Border Express will occupy the 27,900 square metre complex at 98-126 South Park Drive in Dandenong South (pictured, top).

“This is the biggest leasing deal in the Melbourne south-eastern industrial precinct by some margin,” Savills broker Lynton Williams, who marketed the site with colleague Kosta Filinis, said in this statement.

Though the rental price achieved for the South Park Drive factory is undisclosed, the agency said similar assets in the area lease for about $75 per sqm, per annum, net.

“The property generated significant interest throughout the duration of its on-market leasing campaign,” Mr Williams said.

Developed by Frasers Property Australia (which today we reported sold an Epping factory for $15.7 million), this property is not far from a former distribution centre vacated by Bunnings at 29 National Drive.

We reported exclusively last July about that 24,387 sqm Dandenong South building, within Pellicano’s M2 Industrial Estate, renting for $75 psm/pa to Amazon on a five-year term.

According to a recent research report by Savills, the average net face rent for Prime quality industrial property in the south-east increased 3 per cent over the year to average $85 psm/pa.

Incentives (a rental discount offered to tenants, usually in the way of a rent-free period, or contribution to fit-out costs) are between 10 and 20 per cent.

Last month, we reported that Woolworths had leased what will be the biggest supermarket in Southbank – a double-storey 3935 sqm space within the Melbourne Square complex.

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Marc Pallisco

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