This article is from the Australian Property Journal archive
THE Melbourne industrial and logistics property market has hit the ground running with one of the biggest listings of the year, offering a $350 million blockbuster site that accounts for around 25% of the city’s total I&L land supply.
Diversified property group, Sandhurst Retail & Logistics (SRL), is looking to offload the O’Herns Logistics Park.
Located in Epping, 20km north of the Melbourne CBD, SRL is selling the entire park which totals 259.30ha.
The site is being sold as a going concern with work already underway on the first stage and major construction due for completion in mid-2025.
It is being sold with permit approval for an institutional grade industrial and logistics development with a net development area of 118.14ha.
Furthermore, the site has an approved master plan to deliver over 700,000 sqm of GFA.
As well as I&L, the site offers flexibility with the potential to accommodate hyperscale data centres, to capitalise on the growing demand for digital infrastructure in Australia.
The site is being marketed by agents LAWD’s Peter Sagar, Paul Callanan and Henry Sayers, and Colliers’ Daniel Telling, Gavin Bishop, Nick O’Brien and Sean Thomson.
However the agents declined to comment.
Industry sources told Australian Property Journal, that the site could fetch around $350 million, in what is expected to be a highly contested campaign, attracting major institutional and cashed up private investors.
Sources said permit approved and development ready sites of this size are rare.
At 259.30ha, O’Herns represents just under 25% of the current active supply of land in Melbourne, according to modelling from Cushman & Wakefield.
In Melbourne, 1,077 of the 3,169ha of land was identified as active supply and is basically split across the North and West submarkets. The city’s South East submarket is less suitable for institutional developers, with 60% of parcels in the region at under 4ha. Canadian giant Brookfield and pan-Asian logistics leader ESR are developing the only institutional built form options for the first time in the south-east’s history.
With an average annual take-up of 263ha, Melbourne is estimated to have 4.1-years of active land supply remaining.
But the supply deficiency story is the same across the country, despite some 2.3 million sqm of warehouses currently under construction across the country, Australia’s industrial market is set to remain severely undersupplied in the coming years.
Australia is forecast to run out of industrial land by 2029.
This makes O’Herns Logistics Park a highly prized trophy for major global and local institutional players looking to add scale to their portfolio and development pipeline.
Australia continues to be a favoured destination for global investors, with Brookfield telling Australian Property Journal in November that it plans to double the size of its portfolio over 2025/26.
