Cadence Sells Last Mile Asset to Aliro Group for $70.7 Million

Melbourne’s Cadence Property Group has sold a last mile logistics asset with additional development land in Tottenham, Victoria to Aliro Group for $70.7 million.

Cadence purchased the 14.3ha large infill site in April 2019 in a off-market transaction from the Victor Smorgon Group for $30.1 million.

Cadence Managing Director Charlie Buxton said initially the intention was to undertake a staged land subdivision, submitting a planning application for the development in 2020.

“We saw an opportunity for an industrial land release in the tightly held inner western suburbs where there’s been very limited supply,” Mr Buxton said. “However, we decided to pivot to a built-form development outcome on the back of an emerging trend for last mile logistics facilities in inner locations.”

Mr Buxton said the property benefits from excellent freight connectivity, as well as proximity to high density residential areas such as Yarraville and Footscray, making it a perfect location for inner-ring last mile logistics.

Located 427-451 Somerville Road, Tottenham, the supersite boasts 650 metres in street frontage and backs onto a railway line, less than 5km from the Port of Melbourne. The site can accommodate total built form of approximately 80,000sqm which will be delivered over several stages.

Cadence entered a contract with Aliro for the sale of the site subject to the delivery of Stage 1, which consists of approximately 10,000sqm of logistics space over 3 tenancies which recently reached practical completion.

Mr Buxton said that Melbourne’s inner west had not seen any new high quality logistics accommodation delivered in over 20 years and that the estate would provide institutional grade warehouse and logistics space to a growing cohort of businesses looking to get closer to their customers.

“This is an opportunity that naturally meets demand from the growth in last mile logistics and e-commerce boom,” he said.

“The chance to deliver new premium industrial facilities in such tightly held and built-up areas is rare and we are very pleased with the final outcome,” Mr Buxton said.

Aliro’s Chief Delivery Officer & Fund Manager, Andrzej Masztak said “The site was a significant and strategic infill land holding in Melbourne’s inner west”.

“In addition to the site servicing strong demand from customers relocating from South Melbourne and Port Melbourne, there is an immediate opportunity to secure a tenancy on the site for e-commerce, logistics and last-mile occupiers who want to be able to take advantage of the site’s location and road access advantages to meet the growing demand from customers in the Melbourne CBD, fringe and demand centres in the inner west,” said Mr Masztak.

This settlement caps off a busy 6 months for Cadence which has seen the business complete approximately $230 million of development deals including transactions with GPT and Centuria in Melbourne’s South-East.