Frasers, ESR plan $900m estate in southeast Melbourne’s Cranbourne

ESR Australia CEO Phil Pearce and Ian Barter, managing director Australia of Frasers Property Industrial.

Two of Asia’s largest real estate companies have bought land from Salta Properties, owned by the billionaire Tarascio family, with plans to turn the site into a high-tech industrial estate worth more than $900m.

Frasers Property and ESR have teamed up to buy a major parcel and have outlined plans to turn 75 per cent of the 64.4ha block into a built-up estate, with the remaining 16ha split between green space and smaller subdivided lots.

The developers are targeting multinationals with the new site and are laying the tech infrastructure required to power automated warehousing, said ESR Australia chief executive Phil Pearce. “In terms of that technology, the humble old warehouse has specifications that have certainly increased to accommodate for automation,” he said.

The Cranbourne location is being touted by both companies as Melbourne’s next “premium industrial” estate, which will be purpose built for e-commerce, manufacturing, logistics and distribution businesses.

“The 50:50 structure of the JV with Frasers Property Industrial provides both parties access to the highly desirable Hall Rd location and enables the combined might of the JV to deliver much needed prime logistics facilities to Melbourne’s severely supply constrained southeast market,” Mr Pearce said.

“We look forward to continuing the success ESR has experienced at our nearby ESR Greenlink, where we have attracted global e-commerce and logistics providers as long-term customers seeking to leverage the premium facilities in the strategic south east locations to enhance their own operations, which provides a great deal of confidence for this development.”

The partnership is part of a plan to further extend both companies’ reach across Victoria, with a combined 320ha of industrial estates developed between them.

Work on the development is scheduled to start late in 2024, with the first buildings being completed by 2026. While the estate will be developed in phases and will take four to five years to complete, there’s an expectation early buildings will be functioning by 2027, said Frasers Property managing director Ian Barter.

“This acquisition marks a significant milestone for Frasers Property Industrial as we position ourselves to meet the evolving demands of the market,” he said. “This development not only integrates premium logistics and warehouse solutions but also prioritises sustainability and access to amenities, aiming to enhance operational efficiency and wellbeing for our future customers.”

Mr Barter said while the land wasn’t bought with the intention of setting up for tech companies, nothing was off limits, including later supporting data centres. “It’s certainly not the premise on which we’ve bought the site, but it’s certainly an area that both Fraser and ESR are looking at exploring further,” he said.

The 64.4ha parcel in Melbourne’s Cranbourne where ESR and Frasers are developing an industrial estate.

Frasers had its eye on further developments in Victoria for some time, and had recorded increased demand for industrial estates. “The deal aligns with Frasers Property Industrial’s strategic objective to expand our development pipeline in key areas across Victoria, adding to our 2.2 million square metre high-quality land bank in Australia,” Mr Barter said.

“The increased demand for premium industrial assets persists and this site holds immense potential, allowing us to cater to the diverse and evolving needs of valued customers.”

The land was sold via Andrew O’Connell from GO Commercial Industrial. Both Frasers companies are considering subdividing the land with smaller plots for sale.

The site’s proximity to the Western Port Highway, South Gippsland Highway and EastLink make it a convenient place for transport, both companies said. The area is also slated for further development beyond the estate, said Salta Properties managing director Sam Tarascio.

“Salta Properties will retain the 60ha of land to the north of the JV site for future development, emphasising our commitment to ongoing investment and development in Melbourne’s southeast, especially with the upcoming launch of the Dandenong South Inland Port,” he said.