Woolworths has assigned the lease of a state-of-the-art logistics facility in Melbourne’s south east to two tenants, JTC and Borders Express, marking the biggest industrial leasing deal in the precinct for some time.

After selling its Home Timber & Hardware division to Metcash, Woolworths appointed Savills Australia to lease the 27,900sq m distribution centre at 98 South Park Drive, Dandenong South, which was originally developed by Frasers Property.

Savills Industrial's Kosta Filinis and Lynton Williams negotiated the leases on behalf of Woolworths but could not comment on the rental rate. Industry sources say similar assets are being leased out at $75/sq m (net).

“The property generated significant interest throughout the duration of its on-market leasing campaign,” Mr Williams said.

“This is the biggest leasing deal in the Melbourne south-eastern industrial precinct by some margin.”

Mr Filinis said the strong interest highlighted the ongoing tightening of supply of quality industrial assets in the market.

“This major transaction supports the growing popularity of Melbourne’s south-eastern industrial precinct as a preferred location for high-calibre industrial occupiers, due to its superior infrastructure, quality amenity and competitive rentals,” he said.