This article is from the Australian Property Journal archive
ONGOING growth of the e-commerce and logistics sectors has a buoyant Propertylink planning new funds for further industrial and office property acquisitions, while major pan-Asian player e-Shang Redwood remains a takeover threat.
Propertylink’s distributable earnings were up 23% for the 2018 financial year to $55.7 million, at 9.25 cents per security, and distributions per security increased 16% to 7.3 cps.
It has forecast distributable earnings of 7.6 cps to 7.7 cps, distributions of 7.3 cps for the 2019 financial year.
The group has spent much of the year as a takeover target of Centuria Capital and then Warburg Pincus-backed ESR. Propertylink had rejected Centuria’s $573 million takeover offer last year before ESR took raided the register of both groups.
Centuria Industrial REIT last week cashed in its 7.7% holding in Propertylink, leaving Centuria with a 10% stake, while ESR has built up its share to 19.9% and is the group’s largest stakeholder.
Propertylink’s managing director Stuart Dawes said the group is “well progressed” on the establishment of the Propertylink Urban Renewal Partnership with an “existing investor”, which will initially target around $200 million in office and industrial property that present urban renewal opportunities over a 10-year period.
It also said its moving through the next phase of a core-plus/value-add industrial strategy following the full commitment of capital in the PAIP II fund during the 2018 financial year.
“This total return investment style vehicle will focus on building a high quality portfolio of industrial property located in major markets on east coast Australia, where assets present repositioning opportunities,” he added.
These come in addition to the $500 million Propertylink Australian Commercial Trust that it established in December year with new investor Partners Group. PACT maintains its initial capacity for a further $350 million in acquisitions, and targets value-add office investment opportunities in Sydney, Melbourne and Brisbane.
“The positioning of our wholly owned industrial portfolio to urban east-coast infill locations to benefit from the emerging themes of e-commerce and urbanisation is delivering strong tangible value to our securityholders,” Dawes said.
Its wholly owned industrial portfolio is currently valued at $800 million across 30 properties, with a gross lettable area of 461,606 sqm that is 99.2% occupied. Like-for-like rental growth came in at 6.0% for the year, up from 2.57%.
Dawes said Propertylink had taken advantage of strong transactional markets during the year, with the divestment of a number of external fund assets delivering average returns of 25% to investors and $22.3 million in performance fees to Propertylink.
“We will continue to benefit from solid performance fees and co-investment returns embedded across our funds over the coming years.
“With a positive outlook for rental and value growth across these markets, particularly Sydney, we expect to see strong performance across both sides of the business through FY19,” he continued.
During the year it sold off 320 Pitt Street in Sydney for $275 million, for a total return of 38% to investors in the POP II fund; 90 Mills Road in Melbourne’s Braeside for $51 million at a 25% return; and 73 Miller Street in North Sydney for $150 million, realising a return of 15% for POP.
Australian Property Journal
