Strong ongoing demand for industrial investment opportunities has been highlighted after an industrial auction smashed reserve price.
Ten bidders pushed the sale yield for a Dandenong South manufacturing facility to a low 4.26 per cent amid
While auctions for industrial facilities are not commonplace in Melbourne, CBRE’s Mr Homes said the strong result was expected to result in more auction campaigns to leverage current buyer demand.
“Historically low interest rates, coupled with the resilience of Melbourne’s industrial sector during the pandemic period, has resulted in pent-up demand for well located, securely leased investment assets,” Mr Homes said.
“This is driving local and interstate competition for available assets, with 56 bids registered for 6 Capital Drive – resulting in a significantly stronger than expected sale price.”
The Dandenong South property offers a new five-year lease to long-standing tenant Windsor Engineering Group Pty Ltd, trading as Crossle Coils.
The company, which is the oldest heat exchanger manufacturer in Australia, has operated at 6 Capital Drive for approximately 40 years.
The 2,559sqm site features a clear span warehouse and recently refurbished office with a total building area of 1,649sqm.
The purchase comes as the Australian arm of sealant, construction foam and adhesive manufacturer Soudal found a new home in Sydney’s west.
Soudal has moved into 75 Owen Street, Glendenning, on a five-year lease for an annual net rent of $135/sqm.
The European brand relocates from Seven Hills to the 5,670sqm site to accommodate its growth in the Australian market.
The Centuria Capital-owned property features a 4,670sqm freestanding building with warehouse and office space, an expansive and secure yard, and easy access to the M7.
CBRE’s John Micallef, Moshe Greengarten and Cam Grier secured the tenancy on behalf of Centuria Capital.
“Soudal chose this property due to its corporate appeal, large yard and proximity to its key staff and customers,” Mr Micallef said.
“With the former tenant vacating at the end of March there was zero vacancy, highlighting the significant demand for well-located buildings in western Sydney.”