The strategy of acquiring underutilised or vacant mid-size industrial sites is paying off for national property funds manager Centennial, with its newest infill site in Melbourne’s inner-western suburb of Tottenham, attracting waste management solutions giant, Cleanaway, which has signed an 11-year lease on a 10,890sq m warehouse and office facility.
The Cleanaway lease, brokered by CBRE’s Advisory and Transaction Services, Josh Deluca is a significant coup for Centennial and reaffirms to the Australian-owned funds manager and landlord that demand for mid-size, near-city infill sites – particularly fully refurbished sites – remains extremely strong.
Centennial’s Executive Director and CEO, Industrial & Logistics, Paul Ford said the company seized on the opportunity to acquire the 10.37ha Tottenham Industrial Park in late 2018 for $22 million, with stage 1 of the redevelopment nearing completion and stage 2 due for completion Q2 2024.
“The location and flexibility of the site ticked all of our boxes,” Mr Ford said. “Tottenham is a prime, highly land constrained, inner-west industrial suburb 9km from Melbourne’s CBD and is within close proximity to major arterial road and rail networks, plus the Port of Melbourne, 8km away, which we acquired below land value with income producing quality improvements.
“Cleanaway’s upcoming move to Tottenham Industrial Park is a nod to the location of the site, our ability to partner with occupiers and the quality of the value-added refurbishments we are undertaking to appeal to range of industry sectors.”
CBRE’s Josh Deluca said Cleanaway’s 11-year-lease commitment follows its appointment under the Victorian Government’s Container Deposit Scheme, enabling it to commence the internal design and fit-out of its new warehouse that will house specialised recycling equipment.
“Cleanaway expects to be fully operational by October 2023 with its long-term lease also including a further 420 sqm of commercial grade office space,” Mr Deluca added.
Joining Cleanaway in the third warehouse and office facility spanning 4,416sq m will be US-owned shoe manufacturer, Florsheim Shoe Company, which has signed a 5-year lease for its storage and distribution.
Florsheim has recently moved into its new warehouse facility leaving only one 4,416sq m tenancy remaining taking the estate to 75% occupancy prior to practical completion.
Heading Centennial’s development operations in Victoria and South Australia is General Manager Matt Skerrett who has overseen the group’s establishment of the office in Melbourne to service Centennial’s growing southern asset portfolio.
“We’ll continue to identify and acquire quality mid-space assets throughout the southern states, that now comprises 25 assets in Victoria, 3 in South Australia along with a further 5 sites in the development pipeline,” Mr Skerrett added.
“Centennial is buoyed by the quality and scale of tenants drawn to Tottenham Industrial Park and the company will continue to add to its growing portfolio of prime mid-space holdings within the industrial and logistics sector that now comprises 63 assets throughout Australia and valued at around $1.1 billion.”
Centennial also has a further $350 million worth of industrial and logistics projects in the development pipeline.
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