milkrun warehouse
Milkrun’s warehouse in South Yarra covers 400sqm. Image supplied.
  • The 400sqm warehouse in South Yarra will host up to 2,000 grocery products and offices
  • The startup recently raised $75M
  • The area is home to much development activity, such as the largest build-to-rent project in Australia

A grocery delivery start-up has made its Melbourne debut, securing a three-year lease with a three-year option for a ground floor property of 60 Wilson Street, South Yarra.

Fresh from raising $75 million, Milkrun will be using the 400 square metre space as their first dark store in Victoria, with a network of warehouses in Sydney covering 35 suburbs.

Milkrun, having been launched in September of last year, operates dark stores to stock up to 2,000 grocery products that are then delivered by its own rider – not contractors, such as Uber drivers – on e-bikes to customers within 10 minutes of ordering via the app. The startup is expected to grow to 1,000 employees- this year.

Founded by Dany Milham, former CEO of Koala mattresses, saw backing from major US fund Tiger Global management along with AirTree Venture, Skip Capital and Grok Ventures – the private investment arm of Atlassian’s Mike Cannon-Brookes.

The South Yarra site will be used as both as a store and as office space, and was chosen given its densely populated inner-city catchment.

“South Yarra is undergoing a transformational period that is bringing yet more residential and commercial developments, which will further boost the catchment,” said Fitzroy’s Senior Manager – Agency, Lewis Waddell, who negotiated the transaction.

“Milkrun’s decision to set up in Melbourne here is a huge vote of confidence in the future of South Yarra.”

Mr Waddell added that the triple-fronted ground floor premises would provide easy access for Milkrun’s riders.

“The flexibility of the open-plan space drew interest from office, retail, fitness and medical users. Businesses are keen to get into a highly accessible area close to famous Chapel Street and its lifestyle and hospitality amenity,” he said.

“Melbourne’s suburban commercial leasing market has seen a huge number of food and beverage and grocery operators taking up space since the beginning of COVID, in line with a surge in demand for essential products and delivery services.”

Lewis Waddell, Fitzroys

Hive of activity nearby

The warehouse is located near the Forrest Hill precinct, which is one of Australia’s most densely populated areas. A range of projects are occurring nearby, such as Greystar’s $1.5 billion build-to-rent project – the largest of it kind in Australia.

Additionally, Network Capital, Gurner and Qualitas are planning a $1.5 billion Jam Factory redevelopment that will provide 400 apartments and office space, while Goldfields is currently developing a new officer tower on Chapel Street.

Dahua, Spotlight and Simonds Group all have projects in the suburb too.

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