US Interest Underpins $33m Melbourne Warehouse Buy

Centuria Capital Group has acquired a $33-million industrial facility in a “tightly held infill market” in Melbourne’s west. 

The off-market transaction is the fifth industrial asset in the industrial portfolio of Centuria’s US institutional partner, Starwood Capital.

It means the Last Mile Logistics Partnership has now surpassed the $200-million mark.

The deal for the Tottenham asset also highlights emerging international interest in Australia’s industrial market, according to Centuria joint-chief executive officer Jason Huljich.

“Strong domestic industrial market tailwinds, coupled with a weaker Australian dollar, mean international institutions are looking closely at local industrial facilities with compelling value-add opportunities,” he said.

The newly acquired facility at 1 Quarry Road is a 8016sq m warehouse on a 4ha site.

The 20 per cent site coverage provided future development optionality, Centuria head of funds management Jesse Curtis said.

▲ An aerial image of the Quarry Road warehouse.

It is 100 per cent occupied by Cargo Freight Services. Curtis said the property was leased 65 per cent below comparable market rents, which “provides near-term rental reversion upside”.

“We are securing the asset at a 40 per cent discount to replacement cost, which further illustrates Centuria’s aptitude for sourcing value-add investment opportunities for our institutional partners,” Curtis said. 

Built in 2006, the facility is 5km from Port Melbourne, 11km from Melbourne’s CBD and close to major arterial roads The West Gate Freeway and Western Ring Road.

The site, with a 20,000sq m hardstand, three on-grade roller doors and 16 raised loading docks, was acquired from a private vendor represented by Jones Real Estate’s Paul Jones.

Melbourne’s industrial market has remained stable and strong in recent years, with vacancy rates falling in the first quarter of 2025 by 0.2 per cent to 3.1 per cent, the first fall since the first quarter of 2023, according to Knight Frank.

The west was the largest precinct in the sector in Melbourne, accounting for 35.1 per cent of the city’s industrial stock, the agents said.