PGIM Real Estate, the real estate investment and financing business of PGIM, has partnered with Elanor Investors Group (Elanor) in a joint venture to acquire a 19-hectare last-mile logistics development site in Melbourne, making it one of the largest industrial property transactions in Australia this year.

The sought-after site at 522-550 Wellington Road, Mulgrave, has the potential to be redeveloped into a major last-mile logistics estate with 113,000 square metres of gross lettable area in a supply constrained industrial precinct.

The site currently comprises a large 68,000-square-metre storage facility leased to Woolworths until 2026, with Woolworths having announced plans to close this distribution site upon expiry of their lease.

The investment from PGIM Real Estate is made on behalf of its Asia-Pacific real estate strategy, as it continues to tap strategic growth opportunities across the region. The acquisition represents the third successful capital raise completed this year in partnership with Elanor’s institutional distribution partner Fidante.

“The property presents an unprecedented opportunity to acquire an industrial and logistics brownfield site within one of Melbourne’s most tightly held and densely populated areas,” says Myron Poobalasingam, Elanor’s co-head of industrial and logistics. “The site’s unrivalled access to major arterial roads makes it well positioned to capitalize on the much talked about last-mile logistics thematic with the site having access to approximately 35% of Melbourne’s population within a 30-minute drive-time catchment.”

Greg Linklater, PGIM Real Estate’s head of transactions in Australia, adds: “The structural trends of e-commerce penetration and favourable long-term population growth outlook in Australia are making a strong investment case for the logistics sector. This investment presents a compelling opportunity with strong rental growth prospects.”