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Private industrial developer Virtus Property Group has sold two sites in Melbourne’s south-east for $23 million.
The first site, a 23,785sq m property located at Whiteside Road in Clayton South was sold off market to a local developer for $15.5 million on a passing yield of 4.4 per cent. The property is currently tenanted by logistics operator Toll until March next year.
The second site, a six-lot subdivision site at 103-113 Fairbank Road, sold to Chinese investors and owner occupiers for $7.55 million. Sweetening the deal, Virtus purchased this site in October 2017 for just $4 million – almost doubling its value in the space of six months.
The individual lots ranged from $710 to $835 per square metre.
Both sales are believed to set a new record for the Clayton South area according to brokers Cushman & Wakefield.
Related reading: Investec Fund Portfolio Nears $1bn, Eyes NSW Affordable Housing
The Whiteside Road site sold at a land rate of $654 per square metre.
Rolling annual investment increased from $309 to $622 during the first quarter of 2018, according to Cushman & Wakefield’s research on industrial volumes in south-east and east Melbourne.
Andrew O’Connell, Cushman & Wakefield’s head of industrial sales says he has also seen steep residential housing growth in the Clayton area, jumping around 200 per cent in the past ten years.
“This demographic shift is driving further investor interest, and the fact that a subdivided site was sold for almost double its purchase price after only six months is testament to the current levels of demand in the Clayton area,” O’Connell said.
Nearby developments include the University of Melbourne’s $500 million Carlton Connect mixed-use precinct recently greenlit at the old Royal Women’s Hospital site.
The redevelopment will usher more than 8000 jobs into the area.
Monash Council also recently approved a $26 million high rise development in Mulgrave as part of the Nexus Corporate Park estimated to be worth $500 million at completion. The approved 15-storey tower will also provide Mulgrave’s first hotel facility.
