E-Commerce Demand Drives $160m Melbourne Site Sale

In one of Australia’s largest industrial property transactions this year, PGIM Real Estate and Elanor have joined forces to acquire a key industrial site.

The 19ha site at 522-530 Wellington Road, Mulgrave, 21km south-east of the Melbourne CBD, has been earmarked for a last-mile logistics estate.

The estate is expected to yield a 113,000sq m of gross lettable area.

An industry source told The Urban Developer they believed around $160 million was paid for the site.

Property magnate Harry Stamoulis has been reported as the previous owner of the site, picking it up for $90.75 million in 2017.

The site location is why the partners wanted it,  Elanor industrial and logistics co-head Myron Poobalasingam said.

“The site’s unrivalled access to major arterial roads makes it well positioned to capitalise on the much-talked about last mile logistics thematic with the site having access to approximately 35 per cent of Melbourne’s population within a 30-minute drive time catchment,” Poobalasingam said.

Supermarket giant Woolworths currently leases a 68,000sq m storage facility on the site. That ends on 2026 when it plans to close that facility down.

For its part, PGIM Real Estate’s made the acquisition under its strategy to acquire sites in the Asia Pacific region. It is the $305-billion  real estate investment and financing business for PGIM.

In turn, PGIM is a subsidiary of Prudential Financial Inc, with $1.98 trillion in global investment management.

▲ Aerial view of the 19ha site in Mulgrave earmarked for a last-mile logistics park.

PGIM Australia real estate head of transactions Greg Linklater said the continuing growth of e-commerce was underscoring the rising demand for last-mile logistics.

“The structural trends of e-commerce penetration and favourable long-term population growth outlook in Australia are making a strong investment case for the logistics sector,” Linklater said.

“We think this investment presents a compelling opportunity with strong rental growth prospects.”

PGIM Real Estate managing director Steve Bulloch said they had made six strategic investments so far this year in Australia with an emphasis on the logistics and living sectors.

It is also the third successful capital raise this year in partnership with Elanor’s institutional distribution partner Fidante.