The strategy was to secure a well-located industrial unit in an emerging growth corridor where tightening supply and strong occupier demand would drive both rental appreciation and long-term capital growth. Pakenham's industrial precinct sits at the heart of Melbourne's south-east expansion, attracting consistent demand from trade and service-based users. The focus was on functional, small-format assets with broad tenant appeal, limited obsolescence risk, and pricing well below replacement cost.
When the property came to market at $895,000, we moved quickly — leveraging thorough due diligence and deep market knowledge to build credibility with the agent and anchor the vendor to lower expectations. Our offer came in below asking price, supported by clear comparable evidence and a confident, well-prepared position. The result was a purchase at $865,000 against an assessed valuation of $976,000 and a depreciated replacement cost of $1,290,000 — a substantial discount to both fair value and what it would cost to build today. For an SMSF acquisition, the long-term lease structure provided critical risk mitigation and positive cashflow from day one after deposit.
The property delivers a 4.9% passing yield on a current rent of $42,460 per annum, with an assessed market rent of approximately $45,600 — conservative for the Pakenham market. With an upward reversion due at rent review in three years, there is a clear pathway to improved income without any repositioning required. Beyond the rental uplift, the real strength of this acquisition lies in its cost basis: secured well below replacement cost, below comparable sales evidence, and below assessed fair value. In a corridor where land release constraints will only tighten over time, that entry price provides a strong foundation for long-term capital appreciation while the long lease ensures stable, predictable cashflow suited to the client's SMSF structure.
