Ice-cream maker Bulla Dairy has sold a large undeveloped greenfield site in Melbourne’s west for an estimated $19 million as industrial land values soar amid constricting supply.
The dairy company offloaded a 23-hectare “englobo” parcel (a large holding able to be subdivided) in Laverton North at 13-36 Dohertys Road, a site the privately-owned family company had held since 1994.
JLL’s head of industrial, Matt Ellis, and director, Brad Esler, oversaw the deal.
The vacant land was at one stage destined to be transformed into Bulla Dairy’s warehouse and headquarters, a move that didn’t eventuate after the business eventually settled at its current Derrimut address.
Neither agent would comment on the sale price, but other industry sources suggest it went for around $19 million.
The purchaser, Time & Place Commercial, will subdivide the site into allotments suitable for smaller developers or owner occupiers, director Tim Price said.
“Bulla is the next chapter for us. Strategically it’s about eight minutes from the port. It sits on junction of Princes Highway and the Ring Road and is really well placed for both larger and smaller industrial users,” he said.
On the other side of Dohertys Road, Lendlease’s Australian Prime Property Fund Industrial last month snapped up the Myer Distribution Centre from Dexus for $38.15 million.
That 11.5 hectare site had 19,000 square metres of surplus developable land fronting Doherty Road.
Mr Price co-founded Time & Place three years ago as a boutique residential developer before spinning off into the commercial space last year in a joint-venture industrial subdivision with Jeff Xu’s Golden Age group in Williamstown North.
Mr Xu has also invested in the Bulla acquisition.
The second stage of Time & Place’s Williamstown development, on industrial land formerly owned by Exxon Mobil, has almost sold out with a final stage in planning expected to be released later this year.
The appetite for small industrial lots was particularly high among owner occupiers who need small warehouses, Mr Price said.
Mr Ellis said there had been numerous bids for the Bulla site which closed with several unconditional offers from private individuals and institutional groups.
The sale was slowed after VicRoads moved to acquire a strip of the site to widen Dohertys Road and a nearby freeway bridge overpass.
Industrial estates in the west owned by large institutional players like Dexus, Frasers Property and Charter Hall were either full, or close to it, which was driving englobo land prices up, he said.
JLL calculates only seven to eight years of supply remains for industrial land able to handle the 15,000 square metre, or larger, warehouses favoured by institutional players.
“The limited supply of land is already a factor and has resulted in upward pressure on land values.”
“In the last 12 months 2-5 hectare lots have increased [in value] by 29 per cent year on year in Derrimut and 21 per cent year on year in Laverton North and Truganina,” JLL’s report Dispelling the industrial land supply myth suggests.
Large land holdings greater than 10 hectares in the western significant industrial precinct were rarely traded, JLL research director Annabel McFarlane said.
Another 61 hectare infill site owned by a private Malaysian group at 442-540 Dohertys Road hit the market through JLL last year.
By: Simon Johanson
Source: The Sydney Morning Herald