This article is from the Australian Property Journal archive
FUND manager EG has acquired two industrial sites in Melbourne’s eastern suburbs from Forza Capital for $79 million as industrial land supply dwindles.
The assets take the number of properties held within EG’s Australian Core Enhanced Fund (EG ACE) to 12.
The landholdings are located within the land-constrained east, at 15-33 Alfred Street in Blackburn and 6-16 Joseph Street in Blackburn North. They provide a combined gross lettable area of approximately 28,020 sqm with a blended weighted average lease expiry of 5.52 years, and are leased to a variety of industrial, office and recreational use tenants.
“Urban industrial assets such as these offer good access to high-density catchments and large populations and are playing an increasingly important part in the supply chain for businesses seeking fast access to their customers,” EG’s head of capital transactions, Sean Fleming said.
“They just aren’t making any more urban industrial land.”
Land values in Melbourne are expected to show at least a 30% growth rate in aggregate for the year as industrial land supplies decline. In March, it was reported that Melbourne’s industrial land supply is set to run out 5-15 years, with current increased demand only speeding up the diminishing stock.
Researcher Tony Crabb recently told Australian Property Journal‘s Talking Property podcast that underlying demand for industrial real estate will continue to increase, underpinned by e-commerce, food storage, manufacturing, last-mile logistics, and now data centres.
The Blackburn and Blackburn North assets were picked up via a post-market approach through CBRE.
The open-ended, diversified EG ACE received international an equity commitment in April that raised the fund to $1.25 billion. It is targeting office, industrial and retail real estate nationally.
The fund’s purchases this year were headlined by a trio of Sydney and North Sydney office assets for $450 million, while it has also picked up a multi-let industrial estate in Queensland for $32 million, and a Richlands warehouse for $21.5 million.
“The latest ANREV data is showing us that Sydney and Melbourne logistics are the most sought-after asset class across the entire Asia Pacific region so investment success requires a proactive approach on the ground that EG is well equipped to deliver,” ACE fund manager and executive director, Chris Pak said.
