37-39 Macbeth Street, Braeside VIC 3195. The property is located within the established South East Melbourne industrial precinct, zoned Industrial 1 under the Kingston Council planning scheme.

Industrial warehouse facility with a Gross Lettable Area of 1,826 sqm on a land area of 3,033 sqm, representing 60.2% site coverage. The property features a clear span warehouse, renovated internal offices, and a large concrete and bitumen fenced front yard with 30 metres of frontage to Macbeth Street and dual front crossovers. Zoned Industrial 1 under the Kingston Council planning scheme. No heritage overlays are noted.

The asking price is $4,640,000. The property is currently listed as off-market through Cameron Commercial. This equates to $2,541/sqm on NLA and $1,530/sqm on land area.

The true net yield at the guide price is 4.75% (current) and 4.89% (forward). This is calculated after deducting standard 5% management fees from the gross passing rent. The user-provided 5.00% yield is a gross yield calculation, not a true net yield. The property fails the 5.00% net yield threshold for single-tenanted assets.

The current gross passing rent is $231,969.39 per annum plus GST. The lease commenced on 1 January 2026, and no escalation has occurred yet. The first 3.0% fixed increase will occur on 1 January 2027. The true net income after landlord management fees is $220,370.92 per annum. Note that the online listing states an old rent of $145,905 net per annum from a prior monthly tenancy, which has been superseded by this new executed lease.

The lease commencement date is 1 January 2026. This is a new lease replacing the prior agreement that commenced 1 February 2023, which was transferred by Deed on 2 February 2024 and renewed by Deed on 26 November 2024.

The lease expiry date is 31 December 2030, based on the 5-year term commencing 1 January 2026 as specified in the Lease Schedule.

The remaining lease term is 4.68 years (4 years and 8 months) from today. This is a single-tenanted property, so the WALE by income, WALE by total NLA, and WALE by leased NLA are all 4.68 years. This comfortably exceeds the 1.5-year minimum threshold.

The tenant has two further terms of five years each, providing a total potential lease duration of 15 years from commencement. Options must be exercised in writing between 3 and 6 months before the current term ends. Directors must provide guarantees for each renewed lease.

The rent is subject to fixed 3.0% annual increases on the anniversary of each commencement date. A market rent review occurs at the commencement of each new option term. There are no CPI reviews. The 3.0% fixed increases provide predictable income growth throughout the term.

The tenant, PMG Engineering Group Pty Ltd, is a local Melbourne-based SME specialising in plastic injection moulding and toolmaking. They are not a national or international brand. The business has 30 years of operating history and is ISO 9001 certified. The tenant entity (ACN: 673 061 197) appears to be a relatively recent registration, though the underlying business has traded for three decades. Covenant strength should be assessed as part of due diligence.

A security deposit equal to three months rent plus GST is required under the Lease Schedule. This equates to $57,992.35 plus GST at the current rent. The deposit can be provided as a bank guarantee from an ADI approved by the landlord. The landlord may increase the deposit to two times the standard amount if the tenant defaults more than twice.

Craig Trevor Nyssen and Despina Lambrou, both directors of the tenant company, have signed as guarantors. Under Clause 15, they guarantee the performance of all tenant obligations for the term and any further terms, indemnifying the landlord against all loss. Both guarantors signed on 15 December 2025.

This is a net lease structure where the tenant pays 100% of building outgoings for the premises. Clause 5.4 and Item 10 of the Lease Schedule confirm the tenant must reimburse all outgoings including rates, levies, land tax, maintenance, and insurance. For outgoings benefiting the premises only, the tenant pays 100%. For shared outgoings, the tenant pays a proportion based on lettable area. Standard commercial practice dictates that management fees (estimated at 5% of gross rent) remain a non-recoverable landlord cost.

The property is not impacted by flood or bushfire zones. Review of the provided hazard maps confirms the property sits outside the flood overlay (which affects areas to the south and west) and outside the bushfire prone area overlay (which affects areas to the south-east).

The property achieves a FAIL verdict. While the remaining lease term of 4.68 years comfortably exceeds the 1.5-year minimum requirement, the true net yield of 4.75% falls below the strict 5.00% minimum threshold for single-tenanted assets. This yield shortfall occurs because standard management fees (5% of gross rent) must be deducted as a landlord cost to determine the true net position, reducing the apparent 5.00% gross yield down to 4.75% net.

Follow-up items:
1. Confirm email address for Ben Murphy at Cameron.
2. Confirm whether any landlord works were required as part of the new lease execution.
3. Clarify the discrepancy between the old listing data ($145,905 net, monthly tenancy) and the new lease.

This is a functional industrial asset in the tightly held Braeside precinct with excellent access to major arterials including the Dingley Bypass and Boundary Road. The new 5-year lease provides secure income with 3.0% fixed annual escalations, though the tenant is a local SME rather than a national covenant. The property benefits from the South East Melbourne industrial market, which has vacancy rates around 3.5% and strong tenant demand. The critical risk is the true net yield of 4.75%, which falls below the 5.00% minimum threshold for a single-tenanted asset once management fees are deducted. The HAZCHEM signage on site is consistent with the tenant's plastics manufacturing operations.