A strong pipeline of infrastructure projects in Melbourne is fueling appetite for industrial properties, resulting in a spate of leasing transactions in the city’s west over the past month.
CBRE’s Fergus Pragnell said the recent transactions all involved tenants servicing the construction industry, including companies specialising in scaffolding, cranes, pumps/de-watering, concreting, demolition and industrial cleaning.
In the largest deal, World Wide Logistics signed a new lease on a 5,800sqm property at 371-383 Francis Street, Yarraville. The rental was $510,000 per annum.
Another transaction involved the leasing of a 2,241sqm property at 106 Boundary Road in Sunshine West to Vortex Group. Vortex Group will occupy the property for a term of five-years at a rental of $180,000 per annum.
Mr Pragnell said the deals highlighted strong demand for facilities that offered truck traffic and container loading areas, with all properties offering low site coverage.
“While Australia’s strengthening e-commerce sector is stimulating industrial development, there has been a large focus on providing sophisticated facilities that ignore the importance of truck traffic and container loading areas,” Mr Pragnell explained.
“With more industries becoming reliant on road freight, there could be a potential over-supply of buildings that offer fantastic warehousing capabilities, but lack support for truck and container movements. This is subsequently driving increasing demand for ‘low site coverage’ industrial properties, which offer a favourable ratio of yard and hardstand.”
CBRE’s Ricardo Cappelletti said the recent leasing activity highlighted opportunistic activity in the market.
“There has been a significant increase in leasing enquiry in recent months. Many occupiers see the current market as an opportunity to upsize their warehouse while there is so much caution in the economy,” Mr Cappelletti said.
371-383 Francis Street, Yarraville
5,800sqm (GBA totaling 30% site coverage)
World Wide Logistics
106 Boundary Road, Sunshine West
2,241sqm (GBA totaling 44% site coverage)
117 Pipe Road, Laverton North
1,340sqm (GBA totaling 46% site coverage)
5 Everaise Court, Laverton North
615sqm (GBA totaling 26%)
Crane Company Undisclosed
48 Export Drive, Brooklyn
1,750sqm (GBA totaling 36%)
82 Drake Boulevard, Altona
2,100sqm (GBA totaling 51% site coverage)
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CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.