This article is from the Australian Property Journal archive
REDHILL Partners has completed its $16.2 million investment into an industrial facility in Kwinana, Western Australia, which is set to benefit from a $4 billion container port relocation by 2032.
The industrial warehouse site at Beach Street, around 38km south of the Perth CBD, includes a landholding of 31,258 square metres, with a net lettable area of 14,450 square metres.
The acquisition for this latest property, which is fully leased to a SGX-listed company who have occupied the location since 1988, will add to Redhill’s $375 million in assets under management.
Geoff Fraser from Transact Capital was appointed to negotiate the deal in an off-market transaction.
“Kwinana Beach is going through a resurgence of new builds and occupiers after several years of being very dormant,” said Fraser.
“These properties will experience increased demand from companies related to the manufacturing and e-commerce trade, which will continue to support Kwinana’s growth, and the area could benefit from some of the mooted infrastructure projects, such as the relocation of the container port,” said Oliver Mahe, managing director of Redhill Partners.
Mahe also noted that the tight supply of industrial assets in the market is likely to continue, at least while land and construction costs remain elevated, while surging demand still remains selective despite this shortage.
“There was strong investor interest due to market fundamentals but certainly the strong lease structure, via a triple net 10-year lease term with annual reviews of CPI +1.5%,” said Mahe.
Due to its placement in Kwinana’s port vicinity, the site is set to benefit from a proposed $4 billion container port relocation to Kwinana by 2032.
Redhill Partner’s 15 BS Unit Trust is projected to achieve an equity IRR of 11.88% and is forecasted to distribute an average dividend of 8.4% per annum over the five-year investment term.
