Strata industrial appeal set to soar as buyers look for alternate asset classes

Colliers International fields healthy demand for key projects across Melbourne

Melbourne’s strata industrial market is off to a fast start in 2019 as buyers look for alternative markets amidst a changing housing market. 

According to Colliers International’s Andrew Chrapot, the industrial strata market is charging ahead early in the year, with three major, 50-plus unit projects experiencing solid demand and pre-sales.

“We are seeing a direct correlation between the strata industrial market and the housing market, with very similar buyer profiles,” Mr Chrapot said. “But where pundits are predicting some of the heat will continue to come out of the housing market this year, we are still seeing a lot of enquiry for strata industrial assets. 

“Sales are taking a little longer to get across the line, which is generally attributed to lengthier finance processes on the back of the Royal Commission, but buyers are not being dissuaded from strata industrial as a preferred destination for investment or owner-occupier asset class. 

“Indeed, we are seeing some buyers turning their attention towards industrial as the housing market becomes less predictable.”

Leading demand is a new 140-unit strata industrial project, Indwe Park, located at 27 Indwe Street in West Footscray, 10 mins from the CBD, where Mr Chrapot and colleague Charlie Woodley have been fielding outstanding levels of interest in recent weeks.

“We have received over 420 enquiries in an outstanding early response,” Mr Chrapot said. “Owner-occupiers are jumping at the chance to be located close to the CBD in a development that sets itself apart from the general industrial market in terms of amenities and structure. 

“On offer in Stage One is a diverse mix of 44 units ranging from 121-407sqm and starting from $399,000. This project has a particularly unique product mix of traditional office/warehouse units as well as high tech units, lofts and some units with Industrial 3 zoning which allows for associated retail use.

“The project is situated in an up-and-coming location where we are seeing increasing gentrification. Occupants will benefit from a shared community feel, with the developer looking to include common areas and shared facilities.”

At 28-52 Smeaton Avenue in Dandenong South, Elite Property Group has commenced construction on Axis, a new industrial strata offering located in the award-winning, masterplanned Logis Estate. 

Colliers International is fielding solid demand from predominantly owner-occupiers who are attracted to the prominent location, with immediate access to Greens Road and Eastlink interchange. These units range from 143sqm to 745sqm in Stage One, which is due for completion in late 2019.

“Of the 23 units offered for sale in Stage 1, only 10 units remain,” Mr Chrapot said.

At 107 Wells Road in Chelsea Heights, Stellar Residential is making its first foray into the industrial market with a 56-unit development. 

“Stage One of this project is now 96% sold out, despite only launching in September 2018,” Mr Chrapot. “Construction has commenced on these units, which range from 153-1,078sqm and start from $378,295.”
 

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Andrew Chrapot

Manager | Industrial

Melbourne East

Andrew Chrapot has been working for Colliers International Industrial Eastern Team for well over 5 years now and has grown into a market leader and disrupter. Andrew leads the industrial strata team at Colliers International Melbourne, and this role has seen his knowledge and expertise grown immensely in this niche industrial market. Through this role Andrew understands the machinations of a development and how to construct multiple deals at any one time.

 

Andrew also focuses on general brokerage between 500sqm- 2,000sqm predominately in the eastern industrial precincts. This role combined with strata development work has allowed Andrew to broaden his knowledge, client base, relationships and overall property nous. Andrew’s thirst for knowledge and perseverance to ensure that his clients get the best deal separates him from the pack. Andrew’s strong work ethic, along with his ability to adapt to market changes has allowed him to become a respected and valued member of the Colliers International East office.

 

Andrew’s prior work experience and tertiary education has allowed him to effortlessly transition into the commercial real estate business and provided him with invaluable experiences and knowledge that’s used in his everyday business to help his clients and the Colliers International business.

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