HMC Capital has sold a former Masters site in Roxburgh Park in Melbourne’s north to Kennards Self Storage for $35 million, reflecting a 52% premium to its December 2021 book valuation.
The complex comprised a 54,140 sqm commercially zoned site, partially developed with a 11,073 sqm former Masters Hardware store, plus the previous nursery area and 362 car parking bays.
The building was partially leased to three tenants totalling 1,718 sqm, with the balance 9,355 sqm vacant. The acquisition included around 18,000 sqm of undeveloped land.
Kennard’s planned to redevelop the site with a mixed-use scheme including self-storage, retail and fast food.
The buyer planned to take up to 9,000 sqm of the building for a flagship self-storage facility providing over 1300 storage spaces.
Savills’ Peter Tyson, Callum Stenson & Rick Silberman handled the off-market transaction.
“Buyers were attracted to the strong underlying real estate fundamentals with over 54,000 sqm of land zoned Commercial 2, which allows a variety of retail, warehouse and industrial use options,” Tyson said.
“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.”
Silberman said the functional large format building and flexible zoning made 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,” Silberman said.
Last month, Kennards Self Storage teamed up with developer Gurner with plans to build a $1.25 billion major mixed-use development in Adelaide.
The joint venture intended to develop the 1.7-hectare site at 237 Grote Street into more than 750 residences with six-star amenity across four towers.