- The property was acquired in April last year
- Has since seen development to become an over 40,000sqm industrial estate
- Was 100% pre-leased prior to practical completion with six blue-chip tenants
Centuria Industrial REIT (ASX: CIP) has opened its Dandenong South industrial estate.
The property is located at 95-105 South Gippsland Highway, Dandenong South, Victoria, some 40 minutes southeast of Melbourne’s CBD, 34 kilometres from the Port of Melbourne, and 50 kilometres from the Tullamarine Airport.
Known as Southside Industrial Estate, the property provides 40,529 square metres of industrial accommodation on an eight-hectare site. According to Colliers International’s Industrial Market Update, Victoria, Melbourne South East, the vacancy rate in the area is 0.08%.
Centuria acquired land in April 2021
CIP acquired the Dandenong South property in April last year for $26.3 million. Then, the company said the estate required a $62.5 million investment and the end value was estimated to be $88.8 million.
At the time, CBRE’s James Jorgensen told The Property tribune that vacancy rates for prime grade stock in the area was 0.27%, an already exceptional low, notwithstanding the latest figures stated above.
In partnership with Cadence Property Group and Texco Construction, the property was developed into industrial units with spaces ranging from circa 3,400 square metres to 13,000 square metres.
Dandenong industrial estate opens
Centuria said the asset was 100% pre-leased prior to practical completion with six blue-chip tenants including Orora and San Miguel Yamamura Australiasia Group.
“CIP capitalised on a rare opportunity to bring to market additional supply of industrial real estate within Melbourne’s land-constrained southeast industrial heartland, where vacancy is currently 0.08%,” said Jesse Curtis, CIP Fund Manager and Centuria Head of Industrial.
“The strong leasing take-up is testament to Centuria’s leasing capability and the quality of our asset, which has been developed to leverage the continuing demand for well-located urban infill industrial assets. Additionally, the property’s strong sustainability credentials lend themselves to those tenant customers who are conscious of ESG responsibilities.”
Centuria said Southside Industrial Estate has been designed to a five-star Green Star rating with sustainability features including a 200-kWh solar PV system, rainwater harvesting to service lavatory water and landscape irrigation, a solar-powered hot water system, energy-efficient LED lighting and water-efficient sanitary fixtures.
“To completely lease an estate of this size prior to practical completion not only speaks to the quality of the development, but also the high demand for industrial infill space. Space is at such a premium in Melbourne’s southeast and Southside is ideally located near major roads which makes it a very attractive prospect for tenants,” said Charlie Buxton, Managing Director at Cadence.
Greater Dandenong City Council Mayor, Cr Eden Foster said the industrial development was a welcomed investment to enhance the creation of new employment opportunities.
“Our focus is on rejuvenating Greater Dandenong to create a municipality that supports industrial entrepreneurship and quality outcomes for the south east region. We are excited to see the sustainable construction of this estate locally, as the enhancements for this development align strongly with Council’s strategic priorities,” Cr Foster said.
