This article is from the Australian Property Journal archive
TOYS R Us has committed to nearly two-hectare logistics facility at the Clayton Business Hub, taking the south east Melbourne estate owned by pan-Asian giant ESR to full occupancy.
A 10-year lease with two five-year options has been signed at the purpose-built 45 McNaughton Road facility in Clayton South, in Melbourne’s south east.
Development of the facility is expected to be completed by June 2022. Phil Pearce, chief executive of ESR Australia, said the group had been transforming the “outdated” 6.4-hectare manufacturing site into a state-of-the-art business estate.
Colliers’ James Stott, who negotiated the deal with colleague Gordon Code, said one of the key themes to emerge in the industrial sector since the pandemic was a flight to quality, as occupiers look for prime grade facilities in strategic infill locations.
“Toys R Us identified Clayton South as a key target location very early on in the process and the decision to partner with ESR was a no-brainer, based on CBH’s strategic position in a last-mile location balanced with excellent proximity to key customer demographics,” Stott said.
The estate is located in the Monash National Employment Cluster, an area earmarked for current and future growth in education, health and research facilities. The business hub provides excellent access to major transport infrastructure in a strategic last-mile location.
The leasing deal follows the rebranding of Funtastic to Toys R Us earlier this year, after ASX-listed Funtastic acquired Toys R Us owner Hobby Warehouse.
Toys R Us chief executive and managing director, Louis Mittoni, said the new warehouse and office facilities would enable the company to scale “the business considerably and accelerate e-commerce operations”.
Direct Property Connect’s Jordan Grigg represented Toys R Us as their development advisor.
Stott said the logistics centre deal is the third Colliers has brokered on behalf of Toys R Us over the past 12 months.
Industrial land demand across metropolitan Melbourne is consuming an area equivalent to the CBD and Southbank combined each year and rising. Earlier this year, Cushman & Wakefield’s national director of research, Tony Crabb told an Australian Property Institute and REIV conference that Melbourne’s industrial land supply will run out in five to 15 years.
