BTR development sale test for market demand

One of the first large-scale completed build-to-rent (BTR) developments to be offered for sale will test investors’ appetites for the fastest-growing sector in the commercial property market.

Union Quarter at 31-69 McLister Street, Spotswood, is nearing completion and will be home to more than 500 people. The mixed-use development consists of 332 apartments together with a Woolworths and Dan Murphy’s, a medical centre, chemist, and specialty shops, including food outlets and a restaurant.

An artist’s impression of the new speculative warehouse at Essendon Fields.

It is being sold via an international expressions of interest campaign run by Knight Frank agents Langton McHarg, Stephen Kelly and Tim Holtsbaum, together with Conal Newland and Paul Savitz, of Savills.

Union Quarter accounts for about 16 per cent of all operational BTR units across Melbourne, but there are many more in the pipeline. A recent Frank Knight report found the city is leading the way for BTR developments, with 45 per cent of all projects in the works nationally. More than 4920 apartments are under construction and a further 8250 have been approved.

According to the report, across all regions globally, investors are seeking greater exposure to alternative assets, and residential living led by BTR is at the front of the queue.

Essendon Fields

Essendon Fields has begun construction on a new speculative warehouse to cater for burgeoning demand for industrial assets in the inner suburbs.

The group, together with agents Colliers and CBRE, will lease the building, due for completion in May 2024, in its growing Hart Precinct of the business park, located on the site of the former Essendon Airport, 11 kilometres north-west of the CBD.

The development will include a 5134-square-metre warehouse, 500 sq m office, hardstand area and on-site carparking.

“This is an exciting development for Essendon Fields and highlights the attractiveness of our Hart Precinct, which has secured a number of important tenants, including Modscape, for whom we are building a new 20,000 sq m manufacturing facility,” said Essendon Fields’ GM Development Peter Funder.

Harry the Hirer

Events company Harry the Hirer has leased for five years a 10,113 sq m Laverton warehouse previously occupied by Allied Sea Freight.

Colliers industrial agent Nick Saunders managed the off-market deal on behalf of ESR Australia, achieving a strong annual rental in excess of $1.3 million.

The deal comprised two properties of 3974 sq m and 6139 sq m, sitting on a total land area of 26,000 sq m.

“The transport and logistics sector in Melbourne’s west continues to drive up rents for buildings that suit this industry type, as there are limited properties offering low site coverage,” said Colliers national director Nick Saunders.

“The west continues to perform well, despite rising interest rates, driven by a record low vacancy rate of 0.74 per cent, combined with strong demand from tenants seeking larger spaces for business growth,” he said.

Technaus expansion

A fully fitted out office/warehouse in the tightly held industrial precinct of Campbellfield has been purchased for $815,000 by renewable energy company Technaus Solar.

The deal for the 448 sq m building, at 6/17-19 Somerton Park Drive, was brokered by NSL Property Group’s Guy Naselli.

“The prime industrial location coupled with the need to expand into a second office and the terrific access to Sydney Road and Craigieburn bypass made the property an ideal fit,” Naselli said.

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