New speculative logistics developments by Dexus in Richlands (which Dexus are calling Built to Lease) are seeing strong tenant demand with several new tenant commitments recently secured.
Dexus has secured two lease commitments for warehouse and office facilities across 22,200 square metres at Freeman Central (at 425-479 Freeman Road in Richlands), resulting in 65% of the first stage of the estate leased at completion.
The commitments include a;
- third-party logistics operator, ACR Supply Partners, across 12,200 square metres, enabling expansion into Queensland to service its growing e-commerce customer base along the Eastern states of Australia, and
- James Lane across 10,000 square metres, supporting 27 home furnishing retail stores across Australia.
Dexus Australian Logistics Trust acquired the large 9-hectare industrial infill development site in Richlands in April 2019. Development of the first stage of the estate across 34,400 square metres of flexible space is complete, with Stage 2 across 20,600 square metres under construction and due for completion in May 2021.
Dexus Head of Industrial Development, Chris Mackenzie said: “Demand for high quality logistics facilities in precincts that are well located near major transport hubs, continues to underpin our built to lease strategy and we look forward to completing welcoming new customers to Freeman Central on completion of the estate.”
The state-of-the-art Freeman Central facilities are designed with 35 metre super awnings, 13.7 metre internal clearance height and renewable energy features, including 500-kilowatt solar arrays, which will provide significant operational cost savings for the new customers.
The ACR Supply Partners deal was negotiated by JLL Senior Director and Head of Industrial Queensland Shaun Canniffe and NSW Senior Director Greg Pike. The James Lane deal was negotiated by Knight Frank Associate Directors Lachlan Hateley and David Knox.
Our Views
Interestingly, Dexus has coined the term “built to lease” to refer to these projects, taking from the “built to rent” terminology being used in the residential sector. I didn’t use this term, preferring instead to retain the more commonly used term “speculative development”, which is what these assets are.
Dexus are hoping the new term may imply catch on and give investors an impression of lower levels risks. Be wary, speculative industrial developments that may be called Build to Lease are very different to Built to Rent residential projects.
Build to Rent projects can be leased to a much broader number of tenants and in incremental parts as opposed to a single tenant industrial user.
Related Articles
