30 July 2014
Sydney-based property investment and asset management company, Propertylink, has undertaken its single largest logistics investment with the investment in the warehousing facilities at the new Melbourne Markets for $77.4 million.
Melbourne Markets will be a core investment asset of the Propertylink Australian Industrial Partnership (PAIP), which has made several recent logistics and industrial property purchases and now owns more than $327 million in assets Australia-wide, with plans to continue to selectively acquire or develop assets to further grow the portfolio.
The relocation of the wholesale fruit, vegetable and flower markets from Footscray to Epping in Melbourne’s north is a significant infrastructure project initiated by the Victorian Government, with developer Hansen Yunken contracted to deliver the new facilities in the second quarter of 2015.
The Government has already committed heavily to the project and further capital is expected to be invested in the facilities as the 15.6 hectare site is fully developed during the next decade.
Propertylink Managing Director Stephen Day said that the Melbourne Markets investment adds to the overall quality and diversity of the PAIP portfolio and is another foundation investment for the Propertylink Group’s plans to invest in logistics and infrastructure assets associated with Australian food based industries, following on from the group’s $63.4m acquisition last year of 2 refrigerated logistics assets at Melbourne and Brisbane tenanted by RAND Transport.
“We have been considering several opportunities in the logistics infrastructure sector and Melbourne Markets is a blue-chip investment. There has been very strong early take up by existing market tenants, and we expect 100 per cent occupancy from the opening of the markets mid next year,” Mr Day said.
“The markets have been relocated to a prime industrial region of Melbourne and the facilities incorporate the core trading facility, warehousing, distribution centres and value-added businesses.
“We expect that the underlying demand from existing retailers will underpin strong new tenant demand, with the potential for an increase in rental flows for PAIP over the longer term.
“This investment adds to the overall quality and scale of the PAIP portfolio and builds on Propertylink’s 14-year track record in industrial ownership and development, already demonstrated by the $1.8 billion in assets and projects in Australia.
Propertylink’s role will be to assist in the funding and ultimate ownership of the development, working alongside Hansen Yuncken to ensure that the project is delivered on time and on budget.
The Melbourne Markets have been located at Footscray since 1969 and the relocation to Epping, 20 kilometres north of the CBD, will provide wholesalers and retailers with improved transport access and will almost triple the available warehouse space.
The new facilities will provide state-of-the-art operations for retailers and purpose-built warehouse facilities with appropriate insulation, sunken load bays and extended hardstand areas, capable of handling the quantity of vehicles utilising the markets daily.
The market is an important part of the state’s economic infrastructure, and the substantial investment in the new market will enable the approximately $2 – $3.5 billion Victorian fresh produce industry to secure a greater share of the estimated $15.4 billion national industry and further develop export markets.
The exsting market precinct will be part of the proposed port and rail development in Footscray over the next 20 years.