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Icon Developments has exchanged contracts to acquire a strategic logistics site in the northern Melbourne suburb of Broadmeadows, marking the first acquisition under a strategic joint venture with Elanor Investors Group (ASX: ENN) to establish a high-quality industrial and logistics portfolio.
Icon, Australia's fourth-largest builder by number of starts in 2023 and owned by Japanese property and construction giant Kajima, plans to develop the 4.4ha site on 1 Broadfield Road into a $90 million-plus multi-unit logistics estate with a proposed net lettable area (NLA) of 28,000 square metres.
The joint venture partners aim to grow a medium-to-large scale industrial platform along Australia’s east coast worth more than $250 million.
The news comes as Icon commences construction at Cremorne Place, a nine-level 13,000-square-metre office building it is developing in conjunction with Zagame Property at 120 Cremorne Street in Melbourne - one of only a small number of new office projects starting in the Victorian capital.
Icon Developments will continue its counter cyclical development program in the current cautious real estate market by kicking-off construction across a number of its developments in 2024.
These include Motif 3220 in Geelong, Emerald Place in South Melbourne, 499 Kent Street in Sydney’s CBD and two luxury residential Auckland projects – Domain Collection and York House.
The group's CEO Matthew Bourke says the financial backing of parent-company Kajima allows the business to be more investment-selective. Tokyo-listed Kajima Corporation generates annual global revenues of about $25 billion.
“We now have a legitimate and sustainable development pipeline with an end value of circa $1.5 billion across all built form sectors,” says Bourke.
“This latest industrial and logistics acquisition is a new class of investment for Icon Developments. We will continue to partner with industry leading developers in areas that may be seen as a departure from our core business model."
"The Broadmeadows acquisition and our newly-formed partnership with Elanor is an exciting one, we’ve taken a long-term view of the industrial & logistics sectors and we’re looking at other brownfield sites which we intend to add to the portfolio over time," adds Icon Developments chief investment manager Brinn Tavener.
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