Property owners funding robotic system for snack food giant Mondelez

Cadbury owner Mondelez’s sweet deal on giant Melbourne shed


Logistics investment platform Logos has secured one of the biggest leasing pre-commitments of the year, after signing up snack food giant Mondelez as the occupier of a 42,774 sq m automated warehouse to be built in Melbourne’s west.

Mondelez, which owns brands like Cadbury, Pascall, Oreo and Philadelphia, will lease the new temperature-controlled distribution centre at 90 Palmers Road in Truganina on an initial 10-year term starting from July 2024.

As part of the agreement negotiated by specialist supply chain consultancy TMX, Logos will also deliver, own and lease out the specialised automation systems within the warehouse to Mondelez.

Logos head of Australia and New Zealand, Darren Searle, told The Australian Financial Review it was the first time the group was funding the automation component within a development, but said it was becoming more common for developers to “rentalise fitouts”.

“We see automation as more than just part of the fabric of the warehouse, but a critical component in our supply chain infrastructure play. We believe that owning both the warehouse and the automation will have future value,” Mr Searle said.

“We hope Mondelez will stay for a long time, but should they not, the automation is adaptable for another similar occupier.”

Known as an automated storage and retrieval system, it will operate the 37m high bay storage facility that will take up about a third of the distribution centre and offer more than 11,000 sq m of storage space.

Logos will target a 5-Star Green Star Rating for the Mondelez distribution centre implying a net zero building once operational. Sustainability initiatives will include a 1 megawatt solar system and 50,000 litre rainwater tank.

For Mondelez, which will relocate in 2024 from its existing warehousing facilities in Dandenong in Melbourne’s south-east (owned by CapitaLand), the new state-of-the-art shed will bring it closer to major supply chain and transport infrastructure including the Port of Melbourne, Melbourne Airport and the Princes and Western freeways.

The new Mondelēz facility and another speculative 35,000 to 40,000 sq m shed that Logos will begin constructing next year on Palmers Road site will have a total end value of about $300 million once completed. Logos purchased the 16ha site for $44.4 million last year from former VicUrban development director, Michael King and Joe Cairns’s 888 Property Group.

It’s one of six estates, Logos, which is majority owned by Asian real estate funds giant ESR Group, is developing Melbourne, including another on Palmers Road and a number of others in the North.

Its other projects include Australia’s largest intermodal facility, at Moorebank in Sydney’s west, a $4 billion project that Logos is steering as part of a consortium that includes AustralianSuper, AXA IM Alts, Canada’s Ivanhoé Cambridge and TCorp,

A traditional ground-breaking ceremony for the new Mondelez facility was held on Monday.

Mr Searle said it was the policy at Logos not to “speculate” on capitalisation rates (or yields) on its developments, but said investor appetite was still strong as was the demand from occupiers.

According to an October 2022 report from Cushman & Wakefield, industrial rents in Melbourne’s west have increased 21 per cent over the past year and now average $95-$100 per sq m.

Whilst having secured a lease precommitment from Mondelez, Mr Searle said Logos was skewed to undertaking more speculative, generic developments across its land bank.

“Demand is insatiable, incentives have reduced, and face rents are up 20 per cent,” he said.


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