• Asset: 80–86 Canterbury Road, Kilsyth VIC
• Price: about $56 million (reported)
• Site: 4.04 hectares
• Building: about 3,700 sqm office and warehouse, completed about two years ago
• Tenant: DUTT Transport, as its headquarters
• Buyer: Cadence Property Group
• Seller: Fife Capital
• Method: off-market

Before COVID, the site was Hunted Antiques, a market with rented stalls. Before that it held showrooms used by Spare Change/Warehouse Direct and, around 20 years ago, Casual Living. In 2019 local developers Kevin and Ron Ward marketed it alongside a 9.9-hectare block next door, opposite Boral's Montrose quarry.

Fife bought the site in 2021 for $17 million and turned it into a modern logistics facility.

If the reported price is right, Fife has sold for about $39 million more than it paid, before construction and holding costs. That uplift comes from three things: a much better building, a secure tenant and a site with plenty of land around the improvements.

Cadence Property Group, led by Charlie Buxton, gets a near-new, fully leased facility with a transport operator using it as its headquarters. With 4.04 hectares of land and only about 3,700 sqm of building, the site also has a low site coverage that gives it long-term flexibility.

Kilsyth is part of Melbourne's outer east, where established industrial land is tightly held and new supply is limited. Transport and logistics operators serving the eastern suburbs and Yarra Valley value sites with room for trucks, hardstand and parking.

Industrial value-add strategies have done well over the past five years because the gap between old and new buildings keeps widening. Occupiers want modern layouts, higher clearance, better power and room for trucks and they will pay more rent for it. Investors, in turn, will pay sharper yields for a near-new building with a long-term tenant.

That leaves a clear profit for developers who can buy tired sites at the right price, manage approvals and construction risk and lease the result. Kilsyth shows that the strategy still works in established suburban markets, not just on greenfield estates at the city edge.

• Value-add strategies are being rewarded when the end product is leased to a strong operator
• Low site coverage is attracting a premium for its future flexibility
• Off-market deals remain common for quality leased industrial assets

• Know the end buyer: design for the tenant and investor who will eventually own it
• Lease before you sell: a secure tenant turns a building into an investment
• Present the transformation: before-and-after imagery and renders help investors see the value created

Watch whether Cadence adds more leased industrial assets in Melbourne's east and whether Fife recycles its profit into new value-add sites.

• Real Estate Source – Fife banks $56m for antique market turned warehouse