Industrial and logistics developer and manager Logos Property Group is looking to offload a 20-ha purpose-built, industrial estate in Melbourne’s west.
Logos put an option on the site at 435-503 Mt Atkinson Road, about 25km west of Melbourne’s centre, in a joint-venture deal with the global building materials giant James Hardie Industries in February last year.
Online records show the land, which is part of the Troups Road Logistics Estate, changed hands for $103.7 million.
Logos undertook extensive infrastructure work, while James Hardie—the world’s biggest maker of fibre cement products—secured development approval for a 100,000-square-metre production facility.
However, brokers say James Hardie’s focus has moved away from Melbourne and towards Sydney and Brisbane, and it will now not progress with the development.
Global commercial real estate and investment managers JLL value the turnkey package around $250 million.
JLL’s director of industrial and logistics capital markets Joel Scully said potential buyers would be able to collaborate on the design and development of turnkey facilities.
“Onshore and offshore capital groups are actively seeking opportunities to secure prime grade assets in major markets with the ability to realise strong growth in the rental market,” Scully said.
Industrial and logistic rents have continued to rise across Australia, according to data from CBRE, underpinned by extremely low vacancy rates.
“Major occupiers are also seeking opportunities to own their facilities rather than rent to create certainty of occupancy costs which are expected to continue to increase over the medium term,” he said.
The site—with a potential gross lettable area of about 125,000sq m— has good access to Melbourne’s arterial road network, including the Western Freeway and the M80 Metropolitan Ring Road, and is surrounded by several big industrial and logistics players.
JLL head of logistics and industrial capital markets Ben Hegerty said there had been at least 15 groups who had shown interest in the week the property had been listed.
Those had included occupiers, institutional groups and data centres.
“AI (Artificial Intelligence) computing takes up somewhere between four and eight times more search engine power than doing a normal search through, say, Google,” Hegerty said.
“All of the providers are now looking to the AI clients, such as chat GPT and other groups who provide AI-powered paid-prescription arrangements … they’re trying to get those style of users in.
“You’re going to see really big, generic data centres that can just churn through heaps of power. And you’ll see them in the outer metropolitan areas, near power nodes.
“So something like this, where 20ha 12 months ago might have been too big for a data centre operator…well, now they’re saying 20ha, that might be worth looking at.”
The registration-of-interest campaign closes on October 4.
