National self-storage operator Kennard’s has acquired the Roxburgh Park complex for $35million in an off-market transaction from HMC Capital.

Savills’ Peter Tyson, Callum Stenson & Rick Silberman handled the transaction which settled on 30 June.

Roxburgh Park is one of the last remaining assets held directly by HMC Capital with the deal reflecting a 52% premium to the December 2021 book valuation.

The complex comprises a 54,140 square metre commercially zoned site, partially developed with a 11,073sqm former Masters Hardware store, plus the previous nursery area and 362 car parking bays. The building was partially leased to three tenants totalling 1,718 square metres, with the balance 9,355 square metres vacant. The complex included around 18,000sqm of undeveloped land.

Kennard’s intend to redevelop the site with a mixed-use scheme including self-storage, retail and fast food. Kennards plan to take up to 9,000sqm of the building for a flagship self-storage facility providing over 1300 storage spaces, as the group’s expansion nears almost 100 locations in Australia and New Zealand.

Savills’ Peter Tyson commented, “buyers were attracted to the strong underlying real estate fundamentals with over 54,000sqm of land zoned Commercial 2, which allows a variety of retail, warehouse and industrial use options. Like most capital city markets, Melbourne has experienced massive growth in industrial land values over recent years, which coupled with rapidly rising construction costs, makes the investment case compelling.”

“The functional large format building and flexible zoning makes it readily adaptable for a wide range of alternate uses. The market is seeing growing synergy between the large-format retail and industrial sectors, underpinning the alternate use plays emerging from the industrial boom, driven by strong rental growth and yield compression”, added Rick Silberman.