This article is from the Australian Property Journal archive
MCPHEE Group is divesting a circa $200 million portfolio of four brand-new distribution centres in Melbourne and south of Brisbane, tenanted by government and national tenants including Australia Post, as well as one of its own facilities.
The offering provides a combined gross lettable area of 70,465 sqm, a total site area of 142,465 sqm, a secure weighted average lease expiry of 6.7 years, and a net passing annual income of $7,164,572.
They are located at 2 Maker Place in the western Melbourne suburb of Truganina, and at 1–21 McPhee Drive (stages one and two) and 116–130 Gilmore Road in Berrinba, and have been built by Vaughan Constructions.
Tenants include Rinnai Australia, Total Logistics Solutions and McPhee Distribution Services.
JLL and Colliers have been appointed as joint agents to market the portfolio in one line.
Gavin Bishop of Colliers said the portfolio’s superior lease covenants, substantial land holdings, future flexibility, prime locations, and further development potential would appeal to a wide audience on an international scale.
The offering comes as investors will be turning their attention towards new opportunities in the sector after Blackstone’s Milestone Logistics portfolio sold for $3.8 billion to ESR and GIC, while its $850 million Fife portfolio appears to be heading to PGIM and Manulife.
“The Australian industrial and logistics sector entered the COVID-19 pandemic with very strong property fundamentals – including low vacancies, limited speculative activity, relatively strong occupier demand, and growing capital appetite,” Bishop said.
He said the global structural e-commerce tailwind is relatively immature in Australia and is expected to further fuel the trajectory of growth.
Prior to the pandemic, e-commerce market had been growing relatively consistently from 2012 to 2019 at approximately $2 billion per annum, and accounted for 9.3% of total retail sales as at the end of 2019. As a result of the shift in shopping behaviour as Australians were locked down during 2020, that quickly grew to 12.3% of total retail sales.
“Despite the volume of growth recorded last year, the penetration rate of 12.3% remains well below the global average, which suggests that there is scope for further occupier demand and increased take-up,” JLL’s Tony Iuliano said, adding that this is expected to drive significant rental growth across Australia.
“The rise of e-commerce, combined with other tailwinds supporting the occupier market, has seen the industrial and logistics sector in Australia become increasingly institutionalised, with buyers drawn in by strong lease covenants and stable income collection.”
Among those are Charter Hall, which has acquired PFD Food Services and Patties facilities in sale and leaseback deals on its way to $2.5 billion of acquisitions in the current financial year.
Sovereign wealth funds and insurance groups have also increased their presence in the market and were substantial net buyers of Australian industrial and logistics assets in 2020.
JLL estimates there is $45 billion of capital looking to be deployed into Australian industrial real estate this year, after the sector recorded increased sales volumes in 2020 as logistics and warehousing assets were put under the spotlight during the pandemic.
Expressions of interest close 9th June.
