Prime Australia Post Yarra River site for sale

A Melbourne industrial building on the Yarra River, boasting a long-term lease with Australia Post, has hit the market and is tipped to fetch an $35 million.

The rare 8145sqm site at 45-50 Grosvenor St is expected to draw strong attention from inner-city developers and landbankers as Melbourne’s population continues to boom and the opportunity for larger inner-city sites dwindles.

The building was listed by the Lascorp and Herzog Group this month, prompting industry sources to make the dizzying price tag prediction.

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CBRE National Director Investments Mark Wizel says there will be strong interest in the asset but did not comment on the figure.

Instead he pointed to other recent high-profile sales in Melbourne.

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This includes a 19ha property in Mulgrave, which is home to Woolworths’ distribution facility and sold to Harry Stamoulis for $91 million, while computing giant Hewlett Packard sold a 5.6ha site on Burwood Highway to a local investor with links to China for $88 million.

“We expect a strong market reaction from investor/developers particularly those who had expressed interest in several similar properties over the last 12 months,” Wizel says.

“Both properties were purchased for the huge potential they offered as landbank opportunities in a market characterised by a limited supply of development sites and, of course, the ongoing demand for medium density housing, which is not going to change any time soon.

“By contrast, Abbotsford offers a much more central location driving a far greater level of demand for properties of all types. This is undoubtedly a landbanker’s dream.”

The Industrial 1-zoned site comprises a warehouse, which was originally a Weston’s biscuit factory built in the 1950s and was redeveloped in 2009.

The Abbotsford site sits on the banks of the Yarra River.

It offers 9466sqm over two levels including a 1570sqm open-air car park, 122 metres of Grosvenor St frontage, 58 metres on Southhampton Cres, access to the Yarra River and is currently leased by two tenants.

Australia Post’s agreement expires in 2028 and Honeywell in 2021, bringing in a combined $1.87 million per annum.

More than half of the building has been converted to accommodate Australia Post parcel and mail handling operations.

Agent Josh Rutman says the underlying land value and blue-chip tenancy will be major drawcards.

“The asset offers massive potential development upside down the track, but passive investors will also be attracted to a property, which offers a very secure investment and benefits from a recent partial upgrade to a modern online and delivery facility in a very well-located suburb, just two kilometres from the centre of Melbourne.”

Expressions of Interest close September 26.