Industrial innovator Ledlin, which disrupted the industrial market with its new wave of asset classes, flexible spaces and millennial-targeted industrial products, has reached a major milestone across its $160 million portfolio, completing works on its first of a kind Flexie™ project in Springvale.
Flexie™ Springvale encompasses 56 smaller commercial/industrial units within its $80 million Springvale Business Park, ranging from 19sqm – 78sqm and starting at just $99,000 – underpinning the strong uptake from younger entrepreneurs, investors and tradespeople.
The first 45 Flexie™ units sold out in just four days when they launched off-market in 2021, with the subsequent 11 being prepared for sale as the project reached completion.
While many purchasers planned to use their Flexie™ unit to grow their business, there was a strong appetite for investors who have since enjoyed rental yields ranging from 6 percent to 8.5 percent – far above the Colliers industry average for Melbourne in Q2 2023 of 4.75 percent to 5.50 percent.
More than 70 percent of the available units for lease were transacted pre-settlement, achieving rental yields 20 percent above industry norms with minimum two-year terms and 4-5 percent annual rent increases.
The capital growth of Flexie™ has added another string to its bow, with off-the-plan purchasers – many of which invested in property for the first time at Flexie™ Springvale – already gaining a 30 percent uptick in value pre-settlement.
The diverse tenant profile at Flexie™ Springvale is testament to adaptability, accessibility and amenity – domestic storage users, white goods suppliers, e-commerce operators, vending machine hirer businesses, trades, and car collection storage make up some of the clientele at Springvale Business Park.
Ledlin director Oscar Ledlin believes that Flexie’s appeal to a broad spectrum of users and investors, coupled with its nearly non-existent barriers to entry and higher-than-average returns have underpinned its success to-date.
“When Flexie™ was first introduced as a new asset class, no one was quite sure how the market would respond. However, the results have blown us away.
“We’ve found its appeal has gone beyond just owner-occupiers, also becoming a really strong opportunity to younger investors who want to get their foot in the door of the commercial property market.
“It’s a well-documented fact that I turned my back on buying my own home – in fact, I still rent rather than own – to instead grow my own commercial investments, so it’s very humbling to be able to reduce the barriers to entry for those who also want to explore this path,” Ledlin said.
For first-time commercial investor Sermin Sadikovski, the Flexie™unit represented a chance to get his foot in the door with a solid projected return.
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