Neil Werrett's Galileo Group buys industrial site for $130m
Veteran fund manager Neil Werrett’s Galileo Group has paid $130 million for an industrial site in Melbourne’s south-east as a fresh wave of institutional capital targets opportunities in the booming logistics sector.
The 53.6-hectare site at 585 Berwick-Cranbourne Road, in Clyde, has scope to be developed into a large business park and retail complex close to major freeways and arterial roads.
It was offered for sale by local Melbourne developer Steven Sass, co-founder of Oreana Group.
Records show Mr Sass’ Westsock Property paid just $60.5 million for the site in 2019, with the deal only settling in May this year. The site will form part of a new mixed-use suburb called Croskell due to be approved next year.
Industrial land values have surged in Melbourne over the past year as investors have chased the higher returns on offer from new developments, and as big companies seek to build larger, more modern supply chain infrastructure.
Galileo, which Mr Werrett founded in 2003 after two decades at AMP Capital, has acquired $13 billion of real estate in Australia, Japan and the US, while listing two real estate investment trusts on the ASX (including the since delisted Galileo Japan Trust) and one J-REIT on the Tokyo Stock Exchange.
Mr Werrett has also been a leading figure in thoroughbred horse racing, including owning a 50 per cent stake in champion mare Black Caviar, a share of the Vinery Stud in the Hunter Valley and is a board member of the Victoria Racing Club.
A search of the title for 585 Berwick-Cranbourne Road shows a caveat was placed over the property by Galileo OCQ Pty Ltd, a company directed by Mr Werrett.
Selling agents Paul Callanan and Peter Sagar from real estate agents LAWD confirmed the property had sold for $130 million – well above expectations of around $120 million – when it was listed for sale in September.
Mr Callanan said the offering drew interest from private and institutional developers, superannuation funds and syndicates.
“There is currently a flight to quality, and this was simply the best remaining industrial infill site in the most sought-after growth corridor of Melbourne,” he said.
“This property represented a rare opportunity to secure a prime development asset amid strong demand for industrial and commercial land.”
The acquisition by Galileo Group follows superannuation fund-backed investor ISPT paying at least $300 million for a 62ha landholding in Dandenong South – also in Melbourne’s south-east – that could support a $1 billion logistics estate once fully developed.
In August, ISPT splashed out just over $100 million for another site in the south site – a 78.8ha rural property at 425 Officer South Road in Officer South.
Mr Callanan said LAWD had sold more than $500 million of development sites in Melbourne’s south-east corridor over the past 18 months.
The Galileo deal follows another local fund manager, Gateway Capital, partnering with global real estate giant Invesco Real on the acquisition of a 1.8ha industrial site in St Leonards, on Sydney’s lower north shore, for $118.5 million from Dexus.
On the sell-side, Perth-based property syndicator Properties & Pathways offloaded a portfolio of seven industrial and logistics assets in Melbourne, Brisbane and Perth this month for $78.8 million on a 6 per cent yield. Four of the seven properties were sold to fund manager RF Corval in a deal brokered by CBRE.
