A sprawling future industrial hub bigger than some Melbourne suburbs is expected to make $160m in one of the year’s biggest property sales yet.
And it could help remedy Victoria’s backlogged supply chain in the longer term.
The neighbouring Donnybrook Rd, Donnybrook, properties, totalling at 87.34ha, have been approved for redevelopment as a warehousing mecca under the region’s Precinct Structure Plan.
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The combined site is almost the size of bayside suburb Middle Park and tops other neighbourhoods including Balaclava, Cremorne and St Kilda West.
Agents working on the sale are anticipating high demand from Real Estate Investment Trusts, super funds and even super wealthy private groups — all of them expected to cash in on the nation’s growing love of online shopping.
LAWD founding senior director Peter Sagar said the sites had hit the market after they were rezoned for industrial use instead of residential use, as the two developers who own the sites had hoped they would be.
“Both of them aren’t industrial developers … that’s not their core business, so they are looking to exit the properties,” Mr Sagar said.
“Historically one was owned by a farming family who sold it about 10 years back. The other was a land bank for a future quarry.”
CVC Limited and AVID Property Group own the 76.45ha site at 960 Donnybrook Rd, while Kincaid hold the title to the 10.89ha at No. 910 on the same road.
JLL Victorian industrial director Mario Moscon said “institutional grade” warehousing in excess of 5000sq m, the level at which mega distributors like Amazon and DHL become interested, would be among the likely developments to take place at the site.
Mr Moscon said smaller subdivisions to suit more local businesses were also likely, with many distributors looking to boost their warehouse space by as much as 40 per cent compared to before the pandemic as a result of supply chain issues leading to shortages of goods and long delivery timelines.
“We haven’t seen anything this large sell in the north in the past few years, since about 2017,” he said.
He added it was likely both sites would sell to the same buyer, but it was possible they could be sold separately for lower prices.
CoreLogic records show a sale at $160m would easily eclipse the $28.6m Donnybrook local property price record, as well as the $95m highest price paid in neighbouring Mickleham. Both were for large land holdings with development potential.
Initial offers for the two Donnybrook Rd properties close at 3pm on August 10 and Mr Sagar said he expected the sales process would be completed this year, with the zoning approval making it likely development would commence in 2023.
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