This article is from the Australian Property Journal archive
ASX-listed Propertylink to acquire a western Sydney industrial site tenanted by global online fashion retailer The Iconic for $46.6 million.
The 205-231 Fairfield Road site in Yennora was purchased on an initial yield of 7.39%. It 5.5-hectare property has a total lettable area of 31,086sqm and high clearances of up to 13.2 metres long and a corporate office over two levels.
It was sold with a 6.6-year WALE and new 7-year lease to major online fashion and sports retailer The Iconic.
The purchase was made on behalf of the Propertylink Australian Industrial Partnership II (PAIP II), and is expected to settle by February.
PAIP II now has a $220 million portfolio of 11 industrial properties, with a forecast WALE of 5.1 years on settlement of the Yennora asset.
“PAIP II’s strategy is to maximise returns for our clients by acquiring industrial, warehouse and logistics assets in Australia where we can generate further value through active management, lease renewals, targeted capital expenditure and timely disposals,” Propertylink chief executive officer Stuart Dawes said.
Dawes said the growth of online retailers such as The Iconic reflects a broader trend of e-commerce growing faster than total retail sales throughout Australia.
“This trend is resulting in demand for large format logistics facilities such as the Yennora property that are located in key strategic locations in major metropolitan cities. These strong fundamentals, along with tight supply in Propertylink’s preferred Sydney market, are likely to result in higher rents and reduced downtimes,”
Propertylink’s executive director and head of property Peter McDonald said a real feature of the current cycle is the fundamental change in the way supply chains are designed and implemented, largely due to structural changes brought about by e-commerce.
“This has led to increased demand for industrial property in a wide variety of types and locations beyond just the standard big-box warehouse located on major arterial roads.
“This demand, coupled with limited new supply, has resulted in consistent positive net absorption over a two-year period. The beneficiary of this evolving trend has been in-fill locations such as Yennora that are well positioned to service urban cores where a concentration of e-commerce shoppers are living,” McDonald said.
CBRE’s Elijah Shakir was the selling agent.
Australian Property Journal
