- Eight hectares in Dandenong South purchased for $26.3M
- Industrial facilities to be built, raising overall value to over $88M
- South-east Melbourne industrial real estate vacancy rates 0.27%
Centuria Industrial REIT (ASX: CIP) has rounded out April with another acquisition. Earlier this month the company acquired a $27 million distribution centre in Arndell Park.
Today the company announced the acquisition of 95-105 South Gippsland Highway in Dandenong South for $26.3 million.
Following the land acquisition, CIP said it will “construct a six-asset industrial estate, requiring $62.5m investment, which will deliver an asset with an estimated end value of $88.8m.”
The south-east Melbourne market
It is widely known the area is a tightly held and hotly contested parcel of land.
James Jorgensen, a Senior Director for CBRE told The Property Tribune that like residential property, vacancy rates for commercial property is at an all-time low.
“Our records suggest that for prime (A-grade) stock, current vacancy is at 0.27%”
James Jorgensen, Senior Director, CBRE Advisory & Transaction Services, Industrial & Logistics
The incredible growth in south-east Melbourne industrial real estate has seen an “insatiable appetite”, and coupled with diminishing land supply, Mr Jorgensen said underlying land values doubled over the last few years.
Developing the land
The development management agreement has been entered into, Centuria said the new industrial estate will sit on eight hectares of land and include 40,380 square metres of space.
In partnership with Cadence Property Group and Texco Construction, the 40,380 square metres of gross lettable area will be divided into industrial units with space ranging from 3,395 square metres to 13,160 square metres.
95-105 South Gippsland Hwy will join Centuria’s existing seven assets in the tightly held south-east Melbourne pocket, the company calling the acquisition a big win:
“This Dandenong South acquisition is a rare opportunity to secure a high-quality, sustainable asset in a market affected by a scarcity of investment-grade industrial properties.”
Jesse Curtis, CIP Fund Manager
