The strategy was to target small-format industrial assets where passing income didn't reflect true market value — allowing the client to capture both rental uplift and capital growth. Keysborough sits within the prime Dandenong South industrial corridor, where land scarcity and dense surrounding residential development continue to drive long-term demand. Modern, functional units in this pocket appeal to both investors and owner-occupiers, ensuring strong liquidity at exit.
When the opportunity emerged, we identified that the vendor was cash-strapped and motivated to settle quickly. Rather than waiting for the property to hit the open market, we moved fast — anchoring our offer to the current under-rented position of approximately $60,000 per annum net, well below an estimated market rent of $65,000–$70,000. By facilitating swift due diligence and presenting a clean, full offer, we secured the property at $1,090,900 against a valuation of $1,250,000 — approximately 10–15% below intrinsic value. The outcome was a decisive win: the vendor achieved the quick settlement they needed, and our client locked in a quality asset at a genuine discount.
The property delivers a 5.50% passing yield with a clear path to 6.19% once the lease reverts to market in around 18 months, representing an uplift of $5,000–$10,000 per annum. Beyond income, the deal carries embedded capital growth potential — supported by strong land value fundamentals, a quality concrete panel building with minimal obsolescence risk, and a location where industrial supply simply isn't being replaced. While buying on a below-market lease can appear counterintuitive, it's precisely this pricing inefficiency that created the opportunity to secure a modern industrial unit at a discount to both comparable sales and future earning potential.
