Land bankers eye riverside Abbotsford building
The impending sale of an Abbotsford industrial building on the banks of the Yarra River, and home to Australia Post and Honeywell, looks likely to attract the attention of land bankers as inner-city development opportunities diminish and Melbourne’s population expands.
CBRE national director, investments Mark Wizel, who is marketing the 45-50 Grosvenor Street property owned by Lascorp and Herzog Group, with Josh Rutman, Julian White and Lewis Tong, said while the asset offered a secure, blue-chip tenancy profile with a weighted average lease expiry of more than six years, there was no doubt that the site’s underlying land value would be a significant factor in the purchase price.
"We expect a strong market reaction from investor/developers, particularly those who had expressed interest in several similar properties over the last 12 months including the sale of a Woolworths-tenanted property in Mulgrave and a Hewlett Packard site in Forest Hill," Mr Wizel said.
Harry Stamoulis paid $91 million for the Woolworths distribution facility which offered the long-term redevelopment potential of a 19-hectare site, while a local investor/developer with China links acquired the 5.68 hectare HP site at 353-383 Burwood Highway.
"Both properties were purchased for the huge potential they offered as land bank opportunities in a market characterised by a limited supply of development sites and, of course, the ongoing demand for medium-density housing, which is not going to change any time soon,'' Mr Stamoulis said.
The property comprises a 8145-square-metre building over two levels on a 9466-square-metre, Industrial 1-zoned site, which includes an open-air car park of 1570 square metres, and frontages to Grosvenor Street, Southhampton Crescent and the Yarra River.
The property is currently fully leased to Australia Post with a lease expiry of 2028 and Honeywell (2021), at a net passing income of circa $1.87 million per annum.
Originally constructed and occupied as Weston’s Biscuit Factory, the 1950s sawtooth design warehouse was converted in 2009 into a two-level office/industrial facility with a basement carpark. A major part of the building (53 per cent) was more recently converted into an Australia Post parcel and mail handling operation.
Mr Rutman said prospective purchasers would also include passive investors looking at significant capital growth, as the asset offers massive potential development upside in the future.