Centuria breaks ground in high-demand infill Vic industrial market
<0.5% vacancy1 in Melbourne’s North
- $104m ‘M80 Connect’ developed by Cadence and Centuria; five unit 45,375sqm facility; 7.92ha site
- 35% rental growth in Melbourne’s North1,2 (Vic’s highest), record low vacancy, increased tenant demand
- 57% of Melbourne’s future 2023 supply already pre-committed1
- Centuria Industrial REIT’s Melbourne sub-portfolio increases to 34 assets across 480,501sqm worth $1.5Bn
Australia’s largest listed pure-play industrial fund, Centuria Industrial REIT (ASX: CIP), together with development partner, Cadence Property Group, has broken ground on a new multi unit industrial facility within Melbourne’s North, the tightly held infill market where current vacancy rates are less than 0.5%1.
The development, known as M80 Connect, will provide a 45,375sqm lettable area with five separate industrial units ranging between 3,200sqm to 20,000sqm. The facility aims to benefit from the increased demand within the Melbourne market where already 57% of future supply in the 2023 calendar year is pre-committed1.
Record low vacancy and the lack of available stock increased rents in Melbourne’s North by 35.3% year-on-year for Q4 20221,2, the highest within the state.
Jesse Curtis, CIP Fund Manager and Centuria’s Head of Industrial said, “The dual themes of expanding ecommerce and onshoring supply chains is driving demand for industrial space within Melbourne’s urban infill markets. At present, supply cannot keep up with demand.
“Centuria has a strong track record for identifying emerging markets where value-add development, and our in-house repositioning capabilities, can be capitalised to help service occupier needs. Naturally, it is also a pleasure to be working with the Cadence team again, who recently jointly developed our Southside Industrial Estate.”
Positioned at 90-118 Bolinda Road, Campbellfield Vic, the 7.92ha site is within the highly desirable Bolinda Road precinct, which provides excellent connectivity being less than a kilometre from the Hume Highway and M80 Ring Road, enabling easy accessibility to major freeways, as well as NSW freight routes, via the diamond interchange to the south of the site.
The property provides access to a population of more than 4.5 million people within a 60-minute drive time, demonstrating its reach to a dense and growing population.
Charlie Buxton, Cadence Property Group Managing Director, added, “Following the successful development and lease up of Southside Industrial Estate in Melbourne’s South-East with Centuria, we’re pleased to be collaborating again on our second project together.
“Melbourne’s north is a key focus for us and a market that is crying out for quality industrial and logistics accommodation in well-connected locations. Similar to the success of our prior collaboration with Centuria, we expect that the combination of our skillsets will lead to another great result.”
M80 Connect will feature industrial units with a 13.7-metre internal warehouse clearance, ESFR sprinklers, flexible docks, large heavy-duty hardstands with cantilevered and super awnings, and will accommodate semi-trailers and b-doubles with single directional truck flow.
Sustainability features include rainwater harvesting for estate irrigation, water efficient fixtures and fittings and solar PV arrays installed on each tenancy. The estate will target a Green Building Council of Australia Five Star Green Star rating.
Andre Bali, Centuria’s Head of Development, added, “This will be Centuria’s fifth large-scale, brownfield industrial development within the past two years and we remain focused on delivering highly sustainable properties to the benefit of our tenant customers. We will continue to explore further industrial development opportunities to meet market demand, throughout Australia.”
CIP acquired the brownfield site in January 2022. The development is anticipated to be completed in late 2023 with an expected end value of $104.1 million.
M80 sits within CIP’s Melbourne sub-portfolio of 34 industrial properties providing 480,501sqm, valued at $1.5 billion.
CIP and Cadence have jointly appointed industrial design and construct specialists, Texco Construction, to build the facility.
Daniel Eramo and Joe Brzezek from CBRE together with Mario Moscon and Anthony Cannizzaro from JLL are the appointed leasing agents.
1. Source: CBRE Industrial and Logistics Q4 2022
2. Net rents for Super Prime assets
Centuria Capital Group secures a $70.6million industrial logistics facility in North Rocks, NSW, on behalf of US private investment firm, Starwood Capital’s, Last Mile Logistics Partnership (LMLP).
Centuria Capital Group has successfully exchanged conditional contracts to divest two adjoining industrial facilities located at 114 and 120 Old Pittwater Road, Brookvale NSW, which is anticipated to deliver a forecast 13.8% IRR to the assets’ closed-ended fund investors.