Diversified developer Pellicano has re-signed Amazon on a five-year renewal at the global giant’s first Australian distribution centre.
The lease comes as the developer signs with six additional industrial clients across south-east Victoria – spanning a total of 66,025sqm and totalling year one rental of circa $6.5 million.
Pellicano’s total industrial holdings now sit at circa 650,000sqm, which will grow to 690,000sqm on completion of four speculative projects currently under construction, representing 55 percent of the group’s portfolio which also includes retail projects, commercial assets, hotels and build-to-rent apartments in Victoria and Queensland.
The terms range from 30 months to 10 years, highlighting Pellicano’s flexibility and skillset – which also enables it to foster long-term relationships and hold a strong renewal record, build pre-leases and speculative facilities to occupier’s exact requirements, and construct facilities that are attractive to new occupiers – culminating in the company’s consistently low industrial vacancy rate, which currently sits at 0.51 percent.
The full deals schedule is as follows:
- Amazon has signed a five-year renewal on its 24,387sqm site at National Drive, M2 Industry Park
- Bulk Group has signed a ten-year lease at 147 Bayliss Road at M2 Industry Park for a 12,190sqm speculative facility (leased during construction). The group is an existing client of Pellicano’s, and leased this larger facility while sub-leasing its existing space at M2 Industry Park, demonstrating the current strength of the transport and logistics sector
- Storefast Pty Ltd has signed a seven-year lease on an 8,624sqm speculative facility at 59 Vision Street (leased during construction)
- Etex Australia has signed a five-year pre-lease on a 4,311sqm facility which is due for completion in Q4 2022
- Johnson Health Tech Australia (Johnson) has signed a ten-year pre-lease for a 4,407sqm facility at Vision Street, Innovation Park, which is due for completion in Q2 2023. Part of a worldwide manufacturing group producing exercise equipment, Johnson ran a competitive market process – it was ultimately Pellicano’s level of finish and build quality that underpinned Johnson’s decision
- Woodhouse Timber has signed a five-year lease for a 5,769sqm facility at 165 Bayliss Road at M2 Industry Park
- Banter Toys has signed a two year and six month lease at 2 – 10 Nina Link at M2 Industry Park, negotiated directly through Pellicano. This major distributor of licenced toys and collectibles ships to major retailers including Toyworld, Kmart and Target
Underpinned by its recent string of deals and ongoing confidence in the industrial market, Pellicano has also commenced delivery of four further speculative facilities – a 16,500sqm facility at Innovation Park, a 3,938sqm facility at M1 Industry Park and two facilities totalling 19,133sqm at M2 Industry Park.
Recent CBRE data reveals that Australia’s industrial and logistics vacancy rate is now the lowest in the world – sitting at just 0.8 percent, down further from the end-of-2021 figure of 1.3 percent.
As the market continues to tighten, Pellicano managing director Renato Pellicano expects clients to continue seeking out high-quality, large-scale sites that they can grow into, with developers they know and trust.
“ Across the industry we’re seeing vacancy rates continue to fall – backed by CBRE’s recent figures – and I think we’ll see the importance of strong relationships grow even further, as companies seek out new facilities from developers they know they can trust.
“ With growing importance on transport and logistics, e-commerce and storage, and lower vacancy, we also expect to see longer lease terms throughout the industry.
“ We have a strong network of operators, clients and agents, and it’s allowed us to work closely with each individual company to ensure a collaborative outcome that benefits all parties, whether it’s customisations, additions, flexible terms, or anything else they might need – this has underpinned our lease retention rate; 95 percent of our clients re-sign or extend in our facilities.
“ We work hard to foster long-term relationships, which has allowed us to maintain a strong renewal rate –this also speaks to our ability to tailor-make facilities, build to occupier’s exact requirements, and build our assets with the future in mind.
Pellicano’s new speculative facilities are due for completion in mid-2023.