This article is from the Australian Property Journal archive
DEXUS and its newly acquired Industria REIT (ADI) have splurged $1.5 billion on industrial properties across the country, including Perth’s Jandakot Airport, amid insatiable demand for warehousing and logistics assets.
The $1.3 billion Jandakot Airport acquisition will be enabled by Dexus taking two-thirds in the entities that own a 76-year ground lease in Perth’s major general aviation airport, with ADI the balance. Other partners are expected to brought in over time.
Jandakot Airport spans 620 hectares about 20 kilometres south of the CBD and 25 kilometres south west of Perth airport, and offers attractive access via major road networks to the city’s port at Fremantle.
The purchase includes $875 million for a portfolio of 49 properties fully-leased to more than 54 tenants across circa 360,000 sqm, with a 7.6 year weighted average lease expiry and reflecting a 5.2% initial yield and 4.7% cap rate.
A further $225 million is attributed to circa 80 hectares of immediately developable land, of which 12 hectares is currently under head of agreement and the remaining 68 hectares is approved under a current master plan, while the remaining $200 million is for operating the airport.
Dexus and ADI will also jointly acquire a 42,500 sqm logistics facility at Lot 2, 884-928 Mamre Road in western Sydney’s Kemps Creekin a $125.4 million fund-through development.
The facility is close to the development land recently acquired by Dexus at 113-153 Aldington Road in the suburb, where Dexus has secured a pre-commitment with McPhee Distribution services for a 72,000 sqm logistics facility.
Land and development payments will be made from July 2022 until expected practical completion in May 2023.
Meanwhile, ADI has acquired a 100% interest in the Australia Post facility in Melbourne’s western suburb of Truganina for $69 million. Dexus exchanged on the property last month with the ability to nominate an alternate purchaser within the Dexus group.
The circa 30,000 sqm facility property is 100% leased to Australia Post with 4.5 years remaining on the initial term, with a further five-year extension option.
The 66,590 sqm site has further development potential across 16,740 sqm of land, which could accommodate an additional 11,537 sqm of warehousing.
“These are high-quality investments that will further enhance the resilience of our property portfolio,” Darren Steinberg, Dexus CEO said.
“The near term development potential and scope to enhance returns by introducing third party capital make this a compelling opportunity, and one aligned with our priorities to grow our funds management business and recycle capital into high returning opportunities.”
“This transaction also provides the opportunity to achieve a step change for ADI as it secures an interest in quality logistics-oriented real estate with embedded development potential.”
Dexus and APN struck a $320 million takeover agreement in May that would see Dexus buy out the group.
Across the Dexus group, the industrial portfolio will grow to $11.3 billion and spanning 4.6 million sqm post-completion of the near term developments and recent acquisitions.
Record period of industrial sector
In a year of major industrial deals across Australia, the Jandakot Airport transaction is one of the biggest. RCA’s head of analytics Pacific Benjamin Martin Henry told Australian Property Journal’s Talking Property podcast that for the first time in history, industrial demand has outstripped retail and offices combined.
This week, Lendlease pushed further into the industrial sector, striking a joint venture partnership with a Morgan Stanley Real Estate Investing-backed vehicle to acquire a portfolio of logistics and development sites with an end value of $430 million.
GPT is in due diligence to buy Ascot Capital’s $800 million portfolio, while Australia saw its biggest-ever property transaction earlier this year with ESR and GIC’s $3.8 billion purchase of Blackstone’s Milestone logistics portfolio. Soon afterwards, Blackstone offloaded a 90% stake in the Fife industrial portfolio for about $850 million to PGIM Real Estate and Manulife.
Logos then led a consortium that bought the country’s largest intermodal freight facility, Sydney’s Moorebank Logistics Park, for $1.7 billion.
