US private equity real estate firm Cabot Properties has bought a site in Campbellfield, Melbourne for $41 million, with plans to develop a $130 million A-grade logistics estate.
A vendor associated with the Andrianakos family, which recently bought a 50% stake in the Colonnades Shopping Centre in Adelaide, sold the property.
The 93,074 sqm site was situated in the heart of the northern industrial market about 18 kilometres from the Melbourne CBD.
Located at 131-149 Somerton Road, the proposed development will comprise 55,000 sqm of lettable area across three buildings, catering to tenancies from 4,000 sqm up to 45,000 sqm.
The location provided access to Cooper Street, Sydney Road, the Hume Freeway, Metropolitan Ring Road and Tullamarine Freeway.
Jonathan Herb, Director of Investments at Cabot, said the acquisition complemented their existing portfolio and directly aligned with their strategy to develop high quality, sustainable logistics assets in core infill locations.
“It is rare to be able to create an estate of this scale and quality in such a core infill location. Our recent experience in similar markets demonstrates there is a lack of high-quality options for tenants in these locations with all our developments leasing well ahead of PC,” Herb said.
The deal is Cabot’s fifth in Australia, alongside two projects in Truganina and two projects in Melbourne’s southeast.
The development comes as northern Melbourne’s industrial vacancy rate was set to fall towards 0.5% over the coming weeks.
CBRE’s Daniel Eramo and Joe Brzezek brokered the off-market transaction.
“Large-scale infill development sites within Melbourne’s core northern industrial precinct are extremely rare,” Eramo said.
“With this purchase, Cabot is poised to capitalise on the rising occupier demand in the market, and capture future rental growth through the development of its new warehouses.”
It’s the latest industrial transaction in Melbourne, following Dexus Industria REIT’s sale of a warehouse in Kilsyth for $22.17 million a week ago.
Last month, MAB Corporation bought a 32.57-hectare industrial site in Cranbourne East, while Wanslea Terrace sold a warehouse in Scoresby for $16.8 million.
Industrial and logistics investment reached $4.1 billion during the first quarter of 2021, up 27% year-on-year, according to Real Capital Analytics.
On an annual basis, industrial transaction volumes rose 92% to $31.8 billion during the year to March 2022.