This article is from the Australian Property Journal archive
A self storage complex in Melbourne’s south eastern suburb of Cheltenham has sold for $3.6 million by Highway Frontage Real Estate.
The property currently trades under the Storage King franchise and is located at 371-5 Warrigal Road, approximately 20 kilometres from the Melbourne CBD.
An investment syndicate bought the property through an Expressions of Interest campaign conducted by Highway Frontage Real Estate.
Storage King Cheltenham has a frontage of over 51 metres to Warrigal Road with a total land area of 6,420 sqm and has a second frontage to a rear access laneway.
Constructed on site is a self storage complex with a building area of 3,962 sqm which has 80% or better occupancy and has traded from the site for the past 18 years.
Highway Frontage Real Estate’s Robert Stanley-Turner said that the property has significant further development potential upon the adjoining property and has a permit to construct another 91 self storage units on site.
“The self storage complex is currently earning a gross annual income of around $480,000 before the basic business overheads of staffing and operating costs.
“The vendor in recent years has added 90 storage units to the site and together with the completion of an additional 91 units (already approved), potentially the complex could increase its annual gross income to around $750,000 per annum,” he added.
Stanley-Turner said that the self storage industry is still relatively in its infancy in Australia.
He added that superannuation and property funds are recognising the investment potential the sector offers through a combination of capital appreciation of the buildings and reliable cash flow generated by the storage space and complementary services.
“In the USA for instance, there are over 44,000 self storage properties which is five times the density per head of population to Australia and the industry there is still growing at around 10% per annum,” Stanley-Turner concluded.
By Adam Parsons
