Diversified Australian property group, Sandhurst Retail & Logistics (SRL), is calling for expressions of interest in two substantial land lots in Melbourne’s northern industrial precinct, in what is expected to be a tightly contested campaign in the current constrained industrial market.
The 43,352-square-metre (Lot 104) and 21,815-square-metre (Lot 105) parcels are the first to be listed for sale within SRL’s 140-hectare O’Herns Logistics Park at Epping. Believed to be one of the largest land releases in Australia this year and representing an increasingly rare land release opportunity, the lots are expected to sell in excess of $35,000,000.
Zoned for Industrial 1 (IN1Z), the lots are located in the first of nine stages to be developed at O’Herns Logistics Park and strategically situated approximately 640 metres from the Hume Freeway diamond interchange. External works to the estate commenced in August 2022, with stage 1 to comprise approximately 71,000 square metres of built form.
“O’Herns Logistics Park will provide approximately 147,000 square metres of space in the eastern parcel alone. When combining both the eastern and western lots, SRL will develop approximately 500,000 square metres of office and warehouse space for some of the most renowned occupiers and businesses in the world,” he said.
“This will be key to supplying the industry with vital resolutions to the demand for land and supply chain issues impacting the whole of Victoria and Australia”.
SRL’s Managing Director and Chief Executive Officer, Vivek Subramanian, said that O’Herns Logistics Park supported SRL’s vision to “facilitate ongoing value and opportunities in growth areas”.
“The park will provide much-needed development relief in a highly stressed market, enabling businesses to expand and grow,” he said.
“This development is also estimated to support up to 4,000 employment opportunities throughout the development of the estate, and delivers long-term value to future occupiers through its premium connectivity to an expanding transport and infrastructure network.”
SRL is targeting some of the world’s largest industrial and household name occupiers, to lease space from 6,000 square metres to more than 100,000 square metres within O’Herns Logistics Park. Speculative space is expected to be available from 2025, with internal works on Stage 1 anticipated to commence in late 2023.
CBRE’s latest Melbourne Industrial & Logistics Land Supply report highlights that occupier activity in this sector has been the strongest in the country throughout the past three years.
Australian head of Industrial & Logistics Research for CBRE, Sass J-Baleh, said this phenomenon had been driven by a range of factors, including access to the country’s largest port, the Port of Melbourne; strong population growth; the efficient road infrastructure network; and significant rent cost differential between Melbourne and Australia’s other major eastern seaboard markets.
“Our data highlights that Melbourne’s north has recorded the city’s largest vacancy decline over the past 12 months,” Ms J-Baleh said.
“The precinct now has Melbourne’s tightest industrial and logistics vacancy rate of just 0.59 per cent, with limited leasing activity given the lack of stock on the market, which is putting major restrictions on business and job growth and a huge strain on the supply chain.”
CBRE’s Daniel Eramo and Joe Brzezek, alongside Savills’ Daniel De Santis and Mario Moscon, have been appointed to manage the EOI campaign, saying it represented “a rare opportunity to acquire large parcels of industrial and logistics land in Melbourne’s tightly held northern industrial corridor”.
“Land values in Melbourne’s north have increased rapidly over the past 24 months, with most of the acquisition opportunities involving smaller lots of between 1,250 square metres and 5,000 square metres,” Mr Eramo said.
“This has created a gap in the market, with a chronic shortage of medium-to-large allotments, which are in strong demand from both owner-occupiers and institutional owners seeking to accommodate tenants in their portfolios. O’Herns Logistic Park also benefits from its core location, as the bulk of the current land supply is situated in Melbourne’s outer north.”
Upon completion, O’Herns Logistics Park will deliver premium sustainable and future-focused logistics facilities in Melbourne’s booming northern industrial corridor. Floorplates in Stage 1 are planned to range from 5,000 square metres to 30,000 square metres, 24-7 operations and environmentally sustainable design (ESD) principles, including solar power, rainwater harvesting and LED lighting, contributing to a targeted 6 Star Green Star design rating.
A 127-hectare nature reserve at the centre of O’Herns Logistics Park will provide proximity to open green space for people working on site.
“In line with SRL’s commitment to creating future-focused assets that environmentally, economically and socially enrich local communities, the conservation land has been allocated to conserve the natural habitat of the area, allowing native flora and fauna to flourish and remain unchanged,” Mr Subramanian said.
Occupiers will also have extensive amenity on their doorstep, from a community hub with a cafe, gym, meeting areas, community barbeque area, tennis court and basketball court, to numerous walking tracks to be able to appreciate the local environment.
Expressions of interest in lots 104 and 105 at O’Herns Logistics Park open on Monday, 15 May 2023 and close on Thursday, 08 June 2023 at 4pm. www.ohernslogisticspark.com.au