This article is from the Australian Property Journal archive
AUSTRALIAN fund manager Trilogy Funds has added a Bega Cheese warehouse and cold storage facility in Newcastle to its burgeoning industrial portfolio following a $28 million deal.
The fully leased Hexham property at 16 Galleghan Street spans three hectares with a gross lettable area of 1.5 hectares, of which about one-third is cold storage space, and is occupied by Bega as well Downer EDI Engineering Power.
It also incorporates cool room facilities, ambient warehousing and office accommodation.
Trilogy Funds acquired the fully leased property in Hexham on a passing yield of 7.34%.
The agents for the sale were Savills’ Michael Fenton and Michael Wall.
The acquisition expands the size, geographical footprint and tenant sector spread of its Trilogy Industrial Property Trust. More than $40 million in new assets have been added to the trust the past four months, including a Tempur Sealy International warehouse in Melbourne’s south east, and properties Sunshine Coast and Toowoomba, taking its size to over $135 million.
The Newcastle property is the trust’s highest dollar value acquisition to date and its first in New South Wales.
“The 5,000 sqm of cold storage space at the property was a particularly attractive aspect, with limited supply of refrigerated warehousing and record-low vacancy rates driving an increasingly strong appetite for investment in the sector,” Trilogy Funds co-founder and managing director, Philip Ryan said.
“We expect demand for cold storage facilities in Australia will continue to rise, particularly from the food, grocery and healthcare sectors, driven by the growth of e-commerce, restructured supply chains from the COVID-19 pandemic and the globalisation of food industries.”
US-Based Americold recently struck a deal to buy Brisbane0based family-run company Lago Cold Stores for over $106 million, giving it ownership of three temperature-controlled facilities within the Brisbane Port precinct.
That followed Dutch business NewCold pledging to invest $160 million in building Australia’s largest cold storage warehouse, after it secured a commitment from food manufacturing group Simplot.
Institutional and private capital has sought out cold storage facilities recently.
Sales have included Singapore-listed Mapletree Logistics Trust snapping up a red meat cold storage facility in Melbourne’s western suburbs for $43 million, while Charter Hall’s wholesale industrial and logistics fund acquired a portfolio of 25 cold storage and food distribution centres in a $270 million sale and leaseback deal with PFD Food Services in May, and 1835 Capital bought a cold storage facility in Adelaide’s west for $41.5 million from another Singapore-listed group, ARA Logos Logistics Trust.
