E-commerce demand fuels $160m Melbourne site sale

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

The 19ha site at 522-530 Wellington Road in Mulgrave, 21km southeast of Melbourne’s central business district, has been earmarked for last-mile logistics.

The property is expected to deliver 113,000 m2 of gross lettable area.

An industry source said: City developer They believe the site was paid for at around $160 million.

The previous owner of the land was real estate mogul Harry Stamoulis, who purchased it in 2017 for $90.75 million.

According to Myron Poobalasingam, director of industries and logistics at Elanor, this is exactly the location the partners wanted.

“Excellent access to major transport arteries makes it a prime location to leverage the much-talked-about last-mile logistics landscape, with approximately 35 per cent of Melbourne’s population within a 30-minute drive,” Poobalasingam said.

Supermarket giant Woolworths currently leases 68,000m2 of warehouse space on the site. That lease ends in 2026, when it plans to close the space.

For its part, PGIM Real Estate made the acquisition as part of its strategy to acquire locations in the Asia-Pacific region. It is a $305 billion real estate investment and finance business for PGIM.

PGIM, in turn, is a subsidiary of Prudential Financial Inc., managing global investments worth $1.98 trillion.

Greg Linklater, head of real estate transactions at PGIM Australia, said the continued growth of e-commerce underlines the growing demand for last-mile logistics.

“Structural trends in e-commerce penetration and favourable long-term population growth forecasts in Australia provide a strong case for investing in the logistics sector,” Linklater said.

“We believe this investment represents an attractive opportunity and comes with the prospect of strong rental growth.”

PGIM Real Estate Managing Director Steve Bulloch said the company had made six strategic investments in Australia this year, with a focus on the logistics and residential sectors.

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