PGIM Real Estate and Australia fund manager Elanor Investors have jointly purchased a 19-hectare last-mile logistics development site in Melbourne, from a local developer.
The joint venture partners plan to develop the site at 522-550 Wellington Road in Mulgrave into a last-mile logistics estate with 113,000sqm of gross lettable area.
PGIM Real Estate, which has been in Australia since 2011, is making the investment on behalf of its Asia Pacific real estate strategy.
PGIM Real Estate head of transactions in Australia, Greg Linklater, said: “The structural trends of e-commerce penetration and favourable long-term population growth outlook in Australia are making a strong investment case for the logistics sector.
“We think this investment presents a compelling opportunity with strong rental growth prospects.”
Steve Bulloch, managing director and head of Australia for PGIM Real Estate, added: “We feel that 2024 could prove to be a good opportunity to access some very good real estate. We have made six strategic investments so far this year in Australia, with a strong emphasis on the logistics and living sectors.”
Co-head of industrial and logistics at Elanor, Myron Poobalasingam, said the property presented an unprecedented opportunity to acquire an industrial and logistics brownfield site within one of Melbourne’s most tightly held and densely populated areas.
The site currently comprises a large 68,000sqm storage facility leased to Woolworths until 2026, with Woolworths having announced plans to close this distribution site upon expiry of the lease.
Elanor CEO, Glenn Willis, said: “We are pleased to be partnering with PGIM Real Estate in the acquisition of this strategic last-mile logistics investment – an investment we believe will deliver strong investment returns for both PGIM Real Estate and Elanor.”
Co-head of industrial and logistics at Elanor, Amneet Dari, said the acquisition represented the third successful capital raise completed this year in partnership with Elanor’s institutional distribution partner Fidante.
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