This article is from the Australian Property Journal archive
SALTA Properties has added a controversial 123-hectare site to its industrial portfolio in Melbourne’s south east, which on completion will take its holdings in the region to about $2.6 billion worth.
The latest purchase is of 690 Western Port Highway in Cranbourne West, which was the subject of a rezoning push by developer Leighton with the prospect of reaping a windfall in profits, while developer John Woodman was also part of the lobbying.
The Victorian government rejected the moves early last year before an Independent Broad-based Anti-corruption Commission inquiry was set up to look into the matter.
Now, the site – already with industrial zoning – will be turned into a warehousing and logistics estate after Salta settled on its deal, which had been negotiated through Cushman & Wakefield agents, Andrew O’Connell and Peter Sagar.
Sam Tarascio, managing director of Salta Properties, said the purchase is a strategic acquisition to continue Salta’s south east industrial pipeline alongside its nearby 180-hectare Nexus Dandenong South Industrial Estate, the location of the Dandenong South Inland Port, which is currently under development.
“This strategic piece of infrastructure has resulted in unprecedented demand for space at Nexus Dandenong South because of the cost and environmental efficiencies, which clients at the estate will gain as a result of the Dandenong South Inland Port,” Tarascio said.
He said the speed of land take-up at Dandenong South is a key driver for its acquisition of the Cranbourne West site, which is located only five kilometres south of the Dandenong South site.
“Cranbourne West will allow us to continue to offer high-quality logistics developments in the south east region that can benefit from the Dandenong South Inland Port.
Clients at both our Dandenong South and Cranbourne West locations will have priority arrangements with respect to access to the Dandenong South Inland Port.”
Salta predicts that on completion the value of the Cranbourne West project will be in the vicinity of $1.2 billion, in addition to the $1.4 billion on completion value of its Dandenong South estate.
“Industrial has been the strongest performing segment of the market in Australia for the past three years and it is projected that this will remain the case for the foreseeable future,” Tarascio said.
Industrial outperformed on all measures in this NAB’s latest Commercial Property Index survey, with property participants most confident in the darling sector.
Shrinking supply of zoned industrial land in the south east also made land purchase very attractive for Salta Properties.
“We are aware of recent attempts by others to rezone the land for residential use, but Salta has no intention of seeking such a rezoning for this land,” Tarascio said.
Demand for Melbourne industrial land is gobbling up an area equivalent to its CBD and Southbank each year, and Melbourne’s industrial land supply is set to run out in five to 15 years.
