Cadence secured the 20,694 square metre site, which includes 7,821 square metres of warehousing with a short term lease. Cadence was attracted to the Property given the strong location, increasing inner city demand for industrial property and low site coverage. The tenant lease expiry provided a variety of opportunities to deliver a strong outcome for investors.
Located only four kilometres west of the Port Melbourne and the Melbourne CBD, the site presents ideal location for tenants and owner occupiers with access to major roads including the West Gate Freeway, CityLink, Princes Highway and Metropolitan Ring Road.
With the initial intention to upgrade and re-lease the property, the strong performance of inner-city locations and the industrial market led to a strategic review by Cadence, following which Colliers and CBRE were jointly appointed to market the property for sale.
Following this campaign, a contract of sale has been exchanged with international real estate development and management company, Greystar, for $23.1m. Settlement is scheduled to occur in December.
“We are attracted to well-located properties with a variety of options to enhance returns. We have the internal capability to swiftly adjust our strategy at Cadence in order to achieve a strong result for our investors. This was certainly the case for our Robert Street, West Footscray site.” said Tony Mount, Head of Investment Management at Cadence Property Group.
“In the current market, it’s crucial to be flexible in these instances. Initially we had planned to improve the site by way of capital upgrade works, however the demand from purchasers looking for inner city asset was significant.”
Colliers’, Jack Kelliher, who managed the campaign with colleagues Charlie Woodley and Hugh Gilbert, along with CBRE’s Bryce Pane, Andrew Bell, and Tom Hayes, said that 36-38 Roberts Street provided the market with an opportunity to capitalise on the clear shift to infill industrial and logistics locations.
“East coast infill rents have risen 21.4 per cent compared with 15.1 per cent for outer-ring markets in the year to Sept 22,” said Kelliher, “This is due to rising demand caused primarily by the surge in e-commerce, requiring storage and delivery points closer to customers.”
Cadence recently achieved a similar result on a property investment in Redbank, outside of Brisbane, which saw a 62% uplift in value during its ownership.
With over 35 projects completed or underway at a total value in excess of $1 billion, Cadence will continue to grow its investment business in partnership with its private and institutional clients while maintaining a focus of value creating investments.