This article is from the Australian Property Journal archive
A FOOD-grade cold storage facility in Mickleham’s Merrifield Business Park has hit the market with a secure lease in place for the speculative space.
Lot 103 at 5 Titan Drive, Mickleham, around 29km north of the Melbourne CBD, is a forward-funded food-grade speculative logistics facility located within the state’s largest master-planned business and employment precinct, Merrifield Business Park.
Upon completion the asset will include 8,120sqm of improvements across a cold storage, food production and temperature-controlled facility.
Gavin Bishop, Sean Thomson, Nick O’Brien, Corey Vraca and Daniel Telling from Colliers are managing the sale on a fund-through structure via an international expressions of interest campaign.
“As online sales for groceries, meal delivery services, perishable foods, and the distribution of vaccines surged over the past two years, demand for cold storage properties has dramatically increased. Increased occupier demand has been led largely via retailers (including supermarkets), temperature-controlled 3PL specialists, and pharmaceutical groups,” said Vraca, associate director of industrial at Colliers.
The facility is being developed by MAB, GPC and constructed by Texco Constructions and is purpose-built for Sunny Queen Australia on a 10-year initial lease term upon practical completion.
“With a continuing cold storage undersupply, vacancy rates of cold storage assets are at record lows. The sector is currently valued at approximately $6.9 billion in Australia,” said Bishop, managing director of industrial and logistics at Colliers.
“Despite the sector’s recent growth, the cold storage market in Australia remains relatively limited, with its share of total warehouse space estimated to be around 2-3%. Nationally, the vacancy rate for the broader industrial market currently measures 2.6%. However, for cold storage assets, vacancies are closer to zero, with only a handful of facilities available for lease over the next 12 months, exacerbated by the longer construction times given their specialised nature.”
According to Thomson, head of industrial & logistics capital markets at Colliers, Australia is one of the most undersupplied markets for cold storage space globally, with just circa 0.38 cubic metres of cold storage warehousing space per person.
This sits almost 20% below the average for advanced economies globally. And with Australians expected to spend $200 billion on food retail by 2028, CBRE’s Cold Chain Logistics report revealed at least 400,000sqm of new temperature-controlled space will be required to meet these needs.
The $1.2 billion 415-hectare Merrifield Business Park is a joint venture between MAB and Gibson Property Corporation, with tenants including DHL, Dulux, Ford, D’Orsogna and Aeroklas.
The facility boasts immediate access to the Hume Freeway and is just 17km north of the Melbourne Airport.
The international expressions of interest campaign for Lot 103, 5 Titan Drive, Mickleham is scheduled to close on 24 October 2024.
