TNT Logistics has signed a $12.6 million deal with developer Phileo Australia to build a 10,400 sq m facility at its Dandenong Industrial Park, Estate One in Melbourne.
Though unconfirmed it is understood that the building is worth about $9 million with the value of a short five-year lease worth a further $3.6 million. Estate One is located on the intersection of the M1 Freeway and the Princes Highway.
TNT Logistics will join Panasonic and F J Walker Foods at the industrial park which is part of the former 46-hectare General Motors Holden site acquired by Phileo in 1997. About 12.5 hectares remain available on the estate.
In a recent report, the short five-year lease term was coined a powerful signal to the market that tenants are gaining the upper hand in a market characterised by a shortage of stock and capitalisations for five years are almost the same as a 10-year lease now.
TNT Logistics managing director Howard Critchley said the company’s rapid growth in Australia was driving the expansion. The new building is expected to be completed in July of this year. n