13/03/2002 | Vaughan Constructions | Industrial
Biggest industrial deal in Melbourne forces land shortage
The 75,000 sqm facility will dwarf any building in the area ? even in Laverton North where giant warehousing facilities are common place. The building will be three times bigger than the MCG playing surface and capable of holding more than 750,000 cubic metres of stock.
Vaughan Constructions Joint Managing Director Mr Ken Vaughan said the deal was so vast it had helped precipitate a land shortage in Melbourne’s Western Industrial market.
He said Vaughan Constructions won the contract in late 2001 after putting together a land and development package for Murray Goulburn valued at more than $50 million.
“The Murray Goulburn deal alone consumed 30 hectares of land and, when added to the Aldi deal for 30 hectares and some other deals around the same time, took almost 12 months of supply out of the market.,” Mr Vaughan said.
At the same time Vaughan won the Murray Goulburn deal they also locked away precommitments to In Good Care, Toyota Tsushu, Independent Distillers and ACL totalling more than 100,000 sqm and a further 20 hectares of land
To counter the land shortage Vaughan has been land banking and this month purchased 6 hectares at the Gilbertson Estate to add to its 18 hectares spread over Oxford, Angliss and Glengala industrial estates.
The land banking strategy that has seen Vaughan collate more than 24 hectares of prime zoned industrial land over the pat 12 months and it is negotiating on a 24 hectares of vacant land in the Laverton area.
“The key to continued activity in the West is land ? there is a shortage looming and developers need to have a strong supply in hand to be able to accommodate clients over the next 2-3 years,“ said Vaughan Constrictions managing director Mr Ken Vaughan.
He said the market had experienced strong growth in land prices as a result of the shortage with land at Glengala that sold for $60-$65 sqm two years ago now reselling for $85 sqm.
“Pressure for land on the West will continue grow in line with demand for the Western Ring Road and the proposed widening of the Westgate Bridge.
“The transport system in the West is driving tenants into the market and the prices being paid for land and building packages are still very attractive compared to the South East and Northern markets,” Mr Vaughan said.
He said the transport and logistics industry was driving the market in the West but was looking at rental rises of 5%-10% in 2002 as owner occupiers competed for the last of the land on offer.
“As land prices rise the overall development package costs will have to move upwards and that will be translated into higher rents,” Mr Vaughan said.
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