Modern Industrial Facility

34-38 Bakehouse Road, Kensington, Victoria

34-38 Bakehouse Road is a modern last mile logistics facility strategically located on the high-density fringe of Melbourne’s CBD. Comprising a combination of warehouse, office and sought-after cold storage space, this asset has been selected for purchase due to its strategic location, exposure to a tightly held market, and flexible repositioning opportunities.

The Melbourne industrial market continues to experience strong growth fundamentals, underpinned by high levels of occupier demand, limited supply and historically low vacancy rates.

The Kensington asset is currently fully leased to MNX Global Logistics – a wholly owned subsidiary of international logistics company, UPS. The tenant has one year remaining on their lease with a further one-year option, creating an opportunity to capitalise on favourable market fundamentals from re-leasing or sale.

According to JLL’s valuation, the current passing rent is considered to be in the order of 25% below market. This creates the opportunity to drive capital value through the resetting of the asset’s rents to maximise appeal to the investment market. Alternatively, the Kensington area is highly sought-after by owner-occupiers, providing potential to capture capital growth through an owner-occupier sale at lease expiry.





Kensington, 3km from Melbourne CBD


MNX Global Logistics (subsidiary of UPS)



  • The asset is strategically located in a tightly held industrial precinct just 3km from the Melbourne CBD. This location is extremely well suited to last mile logistics users, with proximity to high-density catchments, Port Melbourne and surrounding road networks.
  • According to Cushman and Wakefield, the vacancy rate for Melbourne’s industrial market was recorded at 1.2% for Q4 2023, which has led to sustained rental growth across all precincts, with rents rising a further 3.0% during the final quarter of 2023.
  • The current passing rent for the asset is considered to be in the order of 25% below market (JLL), creating the opportunity to drive capital value through the resetting of the lease at expiry.
  • The asset comprises critically undersupplied cold storage space, placing it in a strong position for divestment to both the owner-occupier or investment market.
  • Should the current tenant vacate at lease expiry, there’s potential to split the facility into two tenancies (subject to approval) to drive income growth.
  • The Kensington area is currently undergoing significant urban renewal and is set to benefit from several infrastructure projects to further drive demand, including the new Metro train tunnel, the Macaulay-Arden Precinct and the expansion of the Royal Melbourne Hospital.

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