The Roxburgh Park property was formerly a Masters Hardware store, but is now partially leased to three tenants. Image: Supplied.
  • Over 54,000 square metres of land zoned commercial 2
  • Previously a Masters Hardware Store
  • Was partially leased to three tenants across 1,718 square metres

Kennard’s Self Storage has acquired a former Masters Hardware store in Victoria from HMC Capital, previously known as Home Consortium.

Sold off-market, Roxburgh Park is one of the last remaining assets held directly by HMC Capital, with the deal reflecting a 52% premium to the December 2021 book valuation.

The Pascoe Vale Road property is some half an hour to forty minutes out of the Melbourne CBD, and comprises a 54,140 square metre commercially zoned site. The former Masters Hardware store occupies 11,073 square metres, along with the previous nursery area and 362 car parking bays.

The building was partially leased to three tenants totalling 1,718 square metres, with the balance 9,355 square metres vacant. The complex included around 18,000sqm of undeveloped land.

Savills‘ Peter Tyson said the property was an attractive proposition, with the buyers drawn “… to the strong underlying real estate fundamentals with over 54,000 square metres of land zoned Commercial 2, which allows a variety of retail, warehouse, and industrial use options.

“Like most capital city markets, Melbourne has experienced massive growth in industrial land values over recent years, which, coupled with rapidly rising construction costs, makes the investment case compelling.

“The functional large format building and flexible zoning makes it readily adaptable for a wide range of alternate uses. The market is seeing growing synergy between the large format retail and industrial sectors, underpinning the alternate use plays emerging from the industrial boom, driven by strong rental growth and yield compression,” added Savills’ Rick Silberman.

For Q2 2022, Colliers‘ said in its Australian Industrial and Logistics Snapshot that the Melbourne market saw circa 200,000 square metres enter the market. Commencements for the city and quarter were also high, at almost 260,000 square metres.

The snapshot also noted Melbourne’s vacancy rate is 0.9%.

Those low vacancy rates have also pushed rents up, Colliers’ snapshot said prime rents increased by 3.7% while on an annual basis they increase by 13.7%. Incentives are also down, current 13.8% for prime, but some submarkets are at around 8.5%.

Kennard’s said it intends to redevelop the site with a mixed-use scheme including self-storage, retail and fast food. Kennards plan to take up to 9,000sqm of the building for a flagship self-storage facility providing over 1300 storage spaces, as the group’s expansion nears almost 100 locations in Australia and New Zealand.

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