Private investment company Arrow Capital Partners has purchased two industrial facilities in the Melbourne suburb of Knoxfield from Dexus Industrial REIT for $22.925 million.
Located at 3 and 4 Forbes Close, the two separately titled properties offered 12,674 sqm on a combined landholding of 2.4 hectares.
The fully leased properties had a weighted average lease expiry (WALE) of 2.5 years by income, allowing for future positive rental reversion in the short-term since the passing rental was well below current market levels.
The properties were strategically located within the land constrained industrial submarket of Knoxfield, 27 km east of the Melbourne CBD
Industrial vacancy levels were less than 1% throughout the eastern corridor, showing unprecedented occupier and tenant demand.
The deal was negotiated by Chris Jones, Adrian Rowse and Charlie Holmes of Cushman & Wakefield, in conjunction with Ben Hegerty and Jack Kelliher of JLL on behalf of Dexus.
“The property generated significant interest from a wide cross section of privates, syndicators and funds who were attracted to the asset’s strong location characteristics, high underlying land value and the precinct’s minimal vacancy,” Cushman & Wakefield’s Chris Jones said.
Earlier this month, Dexus sold the Axxess Corporate Park in Mount Waverley in Melbourne’s southeast to Gateway Capital and Cadillac Fairview for $315 million, marking the single largest industrial deal nationally over the past year.
Australia’s industrial market has experienced record rent surges, with rents growing by up to 24% year-on-year while vacancy remained at a historic low.
New Savills research for Q1 2023 found that a two-tiered land market was also emerging, as distinctions became apparent at a national and precinct level, with higher rates causing prime yields to rise nationally.
After a solid 18 months of unprecedented occupier demand, Savills found that east coast markets were witnessing a growth rate of more than seven times their 15-year average.
