Cadence Pays $27m for Logistics Asset in Melbourne’s South-East

Cadence Property Group chief executive Charlie Buxton said the acquisition aligned with the company’s conviction in Melbourne’s core industrial markets.

“This is a high-quality asset in a tightly held location where supply remains constrained and demand continues to strengthen,” Buxton said.

“We are focused on securing investments that combine secure income with the ability to create value over time, supported by strong fundamentals and strategic positioning.”

The acquisition comes as demand for industrial accommodation across Melbourne’s south-east, where low vacancy rates and limited development activity are supporting rental growth and investor competition, stays keen.

The property’s relatively low site coverage and flexible configuration also provide opportunities for future repositioning, expansion or multi-tenancy use, broadening its long-term appeal to occupiers.

Cadence head of investment management Tony Mount said the group remained focused on assets where active management could drive additional performance over time.

“We continue to target well-located industrial assets where we can actively manage and enhance performance over time,” Mount said.

According to Knight Frank, vacancy across Melbourne’s south-east industrial market is sitting at about 3.5 per cent, with occupier demand remaining firm across logistics and warehouse assets.

New supply is also expected to remain limited, with CBRE data showing a significant proportion of the 2026-27 development pipeline requiring pre-lease commitments before projects can proceed, adding further pressure to the availability of existing industrial stock.

▲ A newly completed office and warehouse facility at Direk is SA was among the assets offloaded by Centuria.

Meanwhile, Centuria Industrial REIT has pocketed almost $200 million from the sale of four industrial assets in Sydney, Adelaide and Melbourne, capitalising on what it says is a continuing shortage of well-located logistics space.

The biggest transaction was the $98 million sale of a cold storage facility at Girraween in Sydney’s west, which was acquired by Centuria in 2021 for $73.1 million.

The 25,420sq m asset at 67-69 Mandoon Road was originally sold by food distributor Bidfood with a seven-year leaseback arrangement.

Centuria said the sale price reflected a 15 per cent premium to the property’s June 2025 book value, underscoring the strength of investor demand for industrial assets in tightly held urban infill markets. A buyer has not been disclosed.

In Adelaide, the fund manager offloaded two assets in the city’s north for a combined $72.7 million. The buyers of both have not been revealed.

A newly completed office and warehouse facility at 50-64 Mirage Road, Direk, sold for $50 million—a 33 per cent premium to total project cost and a 25 per cent internal rate of return, according to Centuria.

The second Adelaide asset, a warehouse at 32-54 Kaurna Avenue, Edinburgh, fetched $22.7 million, about 8 per cent above book value. Centuria bought the property in 2019 for $19.5 million.

And in Melbourne, Centuria and its Morgan Stanley-backed Centuria Prime Logistics Partnership sold 40 Scanlon Drive, Epping, for $24.24 million, 4 per cent above its December 2025 book value. Westbridge Funds Management was the buyer.

The divestments are part of a broader strategy by Centuria Industrial REIT to recycle capital and reduce gearing, with the company saying the transactions achieved an average premium to book value of 17 per cent.

Centuria said demand for industrial property continued to be driven by low vacancy rates, population growth and ongoing pressure on supply chains and logistics operators seeking proximity to major urban centres.

The group has been among the most active industrial investors in the country over the past year, partnering with global institutional capital including BGO and Starwood Capital on a series of warehouse acquisitions and logistics investments across Sydney and Melbourne.

That activity included the biggest industrial deal in South Australia’s history, when Centuria Capital Group paid Quintessential $216 million for the high-performing Port Adelaide Distribution Centre.