ESR Australia has entered a 50-50 joint venture with Frasers Property Australia to develop a A$900m industrial estate in Cranbourne, a South-eastern Melbourne suburb.

The partners bought the 64.4ha site from Salta Properties for an undisclosed sum. But it is believed the deal was transacted at around A$200m.

The partnership will develop the industrial facilities on most of the estate, with part of the land earmarked for small lot sub-divisions for sale. Works on-site are anticipated to start in late 2024, with the first buildings to be completed by 2026.

Phil Pearce, chief executive of ESR Australia, told IPE Real Assets that this was the second joint venture with Frasers Property Australia’s industrial arm.”We find Frasers Industrial to be good partners and there is a good cultural fit between us.”

In 2019, ESR Australia and Frasers Property Industrial jointly developed a A$400m business park in the Melbourne suburb of Mulgrave. The park is now leased to Japanese carmaker Nissan for its Australian headquarters.

Pearce said the new site was 500 metres from the ESR’s master-planned Greenlink site, which is partway through development and has attracted global e-commerce and logistics providers. ESR bought the Greenlink site in 2020 for between “A$75 and A$90m”. The completed value of this project would also be around A$900m.

Ian Barter, managing director Australia of Frasers Property Industrial, said: “This acquisition marks a significant milestone for Frasers Property Industrial as we position ourselves to meet the evolving demands of the market.

“The deal aligns with Frasers Property Industrial’s strategic objective to expand our development pipeline in key areas across Victoria, adding to our 2.2m sqm high-quality land bank in Australia,” he said.

To read the latest IPE Real Assets magazine click here.