14 May 2024

PGIM Real Estate and KM Property Funds have acquired a substantial industrial estate situated in the highly sought-after Laverton North precinct of Melbourne. The estate was acquired by a joint venture between the two Fund Managers and stands as a significant milestone in Victoria's bustling industrial property market.

The estate, located at 13-19 William Angliss Drive, Laverton North, boasts immediate development potential amidst unprecedented market conditions. With the Western Melbourne market experiencing record low vacancy rates and limited availability of developable land, the sale underscores the pressing demand for industrial properties in prime locations.

The asset sold via an International Expressions of Interest campaign through Tony Iuliano, Chris Jones and Adrian Rowse of Cushman & Wakefield alongside Ben Hegerty, Joel Scully and Jack Kelliher of JLL.

PGIM Real Estate is the US$210 billion real estate investment and financing business of PGIM, the US$1.3 trillion global investment management business of Prudential Financial, Inc. It has a strong track record of investing in the Australian market since 2011 for its Asia Pacific real estate strategies. 

KM Property Funds is the commercial real estate investment division of KordaMentha Real Estate. It manages over $600 million in investments across Australia on behalf of private and institutional investors.

According to Tony Iuliano of Cushman & Wakefield, "The sale represents one of the larger individual transactions this year within Victoria and highlights the ongoing demand for scale within the sector, particularly where the potential to further enhance returns exists.

“The sale attracted interest from local, national, and international investors due to the estate's strong underlying tenant covenant, future reversionary upside, and immediate access to surplus land. 

“With upcoming lease expiries for 52% of the lettable area in 2026 and no further term options, there is ample opportunity to reposition the estate in the medium term, aligning with market demands and tenant requirements.

Strategically positioned just 15km west of the Melbourne CBD and 11km west of the Port of Melbourne, the estate comprises three high-quality office warehouse facilities with a Gross Lettable Area of 56,56.7sqm* plus 1.62 hectares of development land, offering unparalleled investment potential. The asset is currently fully leased, providing a WALE (Weighted Average Lease Expiry) of 5.3 years and significant reversionary upside with rental income approximately 27% below market levels.

Ben Hegerty of JLL said "Laverton North is widely regarded as a premier logistics and industrial precinct given its proximity to the Port of Melbourne and arterial road network.

"The upcoming completion of the AU$10 billion West Gate Tunnel project in 2025 will further enhance the precinct's value proposition by improving supply chains and reducing travel times for occupiers in the western market.

“The transaction underscores the resilience and attractiveness of Melbourne's industrial property market, driven by above-trend population growth, continued e-commerce penetration, and strategic infrastructure investments by the Victorian government” he said.

KM Property Funds Contact
Nick Crockett | +61 3 8623 3476  | [email protected]

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