Perth-based developer and fund manager GM Property Group has made its fifth purchase in Melbourne, paying $16.95 million for a Mulgrave industrial estate on a yield of 7.34 per cent.
The property at 730-750 Springvale Road was part of the original Enterprise Park which vendor Marks Henderson bought from ING Industrial Trust in 2002. It's in the centre of the Monash commercial precinct, not far from Monash University.
GM Property Group director Blair Gerrard said the purchase was in keeping with the group's investment philosophy to focus on strategic infill industrial properties with high underlying land value.
"The high-profile main road location, the Monash precinct employment base, the Special Use 6 zoning that allows higher value redevelopment options, the low site cover and the multiple tenants diversifying the tenancy risk are all favourable characteristics," Mr Gerrard said.
"Furthermore, the future rental upside and the existing multiple titles which provide development and divestment options, was compelling," he said.
There are four office-warehouse facilities on the 3.1 hectare site, covering 17,100 square metres. It has an average five-year weighted annual lease expiry (WALE) returning $1.2 million a year. Tenants include ACER, Shop Fitters & Building Services, Moffat and Form A Sign.
The off market deal was negotiated by Savills Australia directors Chris Jones and Ben Hegerty, who said there was plenty of redevelopment going on in the area with Monash University building a new facility on Wellington Road.
"This is too good for redevelopment, especially with a five year WALE, but it lends itself to an office park in the future," Mr Hegerty said.
While GM Property Group is an active developer in Perth the group has stuck to industrial investments in Melbourne, although many of its acquisitions have redevelopment potential.
In June, the Perth group paid $17.525 million for a small distribution centre at 15-33 Alfred Street in Blackburn, which was offloaded by the Bunnings Trust in a deal struck by CBRE's Rory Hilton. That property comprises a 20,400 square metre warehouse on a 4.1 hectare site.
In April, GM had bought another property from Marks Henderson, paying $19.65 million for the Brooklyn Distribution Centre at 600 Geelong Road on an initial passing yield of 9.23 per cent.
The investment fund set up to own that asset has closed over-subscribed.
Marks Henderson has been freeing up capital to make some bigger acquisitions. It paid more than $80 million to buy the Brandon Business Park, further up Springvale Road in Wheelers Hill, and around $32 million to buy an office tower at 52 Collins Street.
