Derrimut deals sets new records for industrial

A private investor has snapped up a state-of-the-art distribution centre in Melbourne’s west pre-campaign for more than $20million as competition for industrial and logistics assets across the state continues to heat up.

In a deal negotiated by Colliers’ Jack Kelliher, Nick Saunders and Hugh Gilbert a private investor has acquired a 9,265sqm distribution centre at 20 Calarco Drive in Derrimut for a record $20.85million. The transaction represents a record yield of 3.3% and a capital rate of $2,250.40/sqm.

The modern building, which sits on a 21, 290sqm site, is occupied by Cryer Malt – the largest distributor of craft-brewing ingredients in Australia and New Zealand.

Mr Kelliher said the property was snapped up prior to the sales campaign commencing, at a record price due to the quality of the asset and covenant on offer.

“Multiple institutions put forward expressions of interest and submitted offers pre-campaign,” he said.

“The asset really captured the attention of the ever-growing pool of buyers looking to invest in the industrial and logistics market.

“The sale represents a record for the industrial and logistics sector in Victoria, as it represents the sharpest yield to date. There is insatiable demand for securely leased industrial investments that are well located within core markets throughout Victoria.”

The successful purchaser intends to utilise the property as a passive investment, as it was offered with a WALE of 9.5yrs.

Situated in an established western industrial precinct, the property offered unparalleled arterial linkages, a vast residential catchment and connectivity with surrounding commercial precincts.

In the first half of 2021, more than $3.5billion worth of industrial assets traded in the Melbourne market (>$10 million). Almost $2.1billion was sold in 2020.

“Led by a significant weight of capital from both domestic and offshore groups, industrial yield compression across Melbourne has averaged 115 basis points over the past 12 months within the prime market,” Mr Kelliher said.

Drew Williams of Rutherfords Property advised the purchaser on their acquisition.

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About Warwick Petschack

Warwick has over 25 years of property investment and management experience. Principally responsible as Managing Director for Capital Management Australia and Joint Managing Director for Chauvel Capital Partners and Editor of Australian Property Markets News.

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