Just over 20-month’s since national unlisted property funds manager Centennial, purchased a large 31,120sq m industrial and logistics facility at Royal Park, 8.5km north-west of Adelaide’s CBD for $5.4m, the specialist in mid-scale infill developments has put up the fully-leased sign before redevelopment works have been completed.
Global air-conditioning giant Daikin, will move into its new Royal Park DC headquarters on Brandwood Street upon completion, comprising 7,580sq m of office, warehouse and showroom space.
The 10-year lease was brokered by Savills’ Darren Curry and Steve Bobridge.
The site had been vacant for a number of years when Centennial acquired it, however Paul Ford, the group’s Executive Director and CEO Industrial & Logistics, said the site possessed all the key elements to becoming an institutional-grade of scale asset within the Adelaide market.
At the time of purchase, Mr Ford said the site held enormous potential for value-adding due to its unrivalled location, generic design and flexibility that would appeal to a broad range of industry sectors and usages and was acquired well below land value.
“Royal Park DC and its soon-to-be-finished warehouse and hardstand areas is a prime example of our national strategy of sourcing mid-space and functional assets that offer strong connectivity to major distribution networks in often land-constrained, inner-ring/urban locations at scale,” Mr Ford said. “It also supports our key focus of working with high quality occupiers that are often starved of institutional service in their ‘mid space’ requirements.”
Michael Trad, Daikin Australia’s General Manager of Supply Chain and IT, said the company was drawn to Royal Park due to factors including geographical location, size and distribution capabilities. “The proximity to ports and Daikin customers presented us with a solution that would improve our effectiveness in the market. The Centennial team has been able to accommodate our unique design requirements to align the site to our operational needs.
“The investment to centralise our entire Adelaide business into one site will showcase a consolidation of the state sales and service offices; a new state-of-the-art training academy; trade and spare parts outlet, together with a Daikin operated warehouse housing Daikin Australia’s full product range of both Australian-made and imported products,” Mr Trad said.
“Our vision for the short and long term future is to ensure that efficiency, customer experience and growth all work hand in hand.”
Savills’ NSW Director of Industrial & Logistics, Darren Curry said the Royal Park DC was an ideal location for Daikin given its proximity to the motorway and ability to leverage its corner location and generic design to offer a wide variety of space options and usages.
“Competition for the site from prospective tenants was high and combined with Adelaide’s tight vacancy rates in the industrial and logistics sector – sitting at just 1.3 per cent (Q4 ’22) – plus very little new supply coming onstream in 2023, I expect demand for quality sites such as Royal Park DC to remain strong,” Mr Curry said.
Joining Daikin will be major national logistics group, Allied Express, which has committed to leasing a 5,250sq m warehouse facility over five-years that was brokered by Martin James of JLL.
“The purchase and subsequent redevelopment of the Royal Park Distribution Centre has enabled us to continue to differentiate and continue to convert privately owned real estate, into institutional-grade assets of scale to enhance our returns to investors,” Mr Ford said.
National construction group, FDC Construction & Fitout was appointed to redevelop the site and according to Project Director, Adam Cuff, Royal Park DC has contributed greatly to improving the quality of industrial commercial space in Adelaide.
Centennial will continue to add to its growing portfolio of niche ‘mid-space’ holdings within the industrial and logistics sector that now comprises 63 assets throughout Australia and valued at approximately $1 billion, together with an additional development pipeline in excess of $350 million.
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