This article is from the Australian Property Journal archive
PROPERTY fund manager ISPT has lobbed three super-prime industrial assets in Sydney and Brisbane to the market, with combined expectations of $250 million, which it will recycle into develop-to-core projects in its logistics pipeline.
The industrial properties on the block are Kookaburra Logistics Estate in south-western Sydney’s Prestons, South Pine Road, in Brendale, and Interchange Industrial Estate, both in Moreton Bay.
The 6.1-hectare site in on Kookaburra Road North in Preston was developed by ISPT in 2022 and has 33,644 sqm of gross leasable area, leased to Invenco, Intercentral Logistics and Fieldturf Australia with a 7.2-year weighted average lease expiry (WALE).
The Brendale asset has 31,738 sqm of warehousing on a 9.7-hectare site, leased to VIP Plastic Packaging and Modern Star, with a 3.7 year WALE.
Interchange Industrial Estate is composed of 34,382 sqm on a 10-hectare site and is leased to Bunnings, Apex Building Products, Cleanaway, Liquid Specialty Beverages, Avante, Merlin Marine & Leisure, and T-Pac Lumber, with a 4.9 year WALE.
“The sale process is a part of our Core Fund portfolio curation strategy which includes selective recycling of capital into further develop-to-core projects within our extensive logistics development pipeline,” said head of funds management at ISPT, Matthew Brown.
“With the focus on industrial and logistics assets from an unprecedented number of global and onshore groups, this portfolio showcases prime locations, modern infrastructure, and strong tenant profiles, all contributing to attractive rental yields and long-term stability.”
JLL and CBRE have been appointed to market the assets.
Investor demand for logistics and industrial assets in 2023 exceeded office sector volumes for the second time in 15 years, with industrial representing 34% of total activity last year, up from 29% in 2022, JLL data shows.
JLL’s Ben Hegerty said, “There is no doubt rental growth has been an important incentive for developers to dust off their plans, but it has also been important for investors as it has created strong positive rental reversionary potential in many markets.
“We are observing a huge wave of capital searching for logistics and industrial product, driven by an increased understanding of the long-term structural tailwinds driving growth in the sector and with forecast stability in debt markets.
“With returning competitive tension and narrowing of ‘bid to ask’ spreads, we are likely to see an even higher levels of transaction volumes in 2024 and beyond.”
JLL data shows the logistics and industrial sector saw $6.2 billion in direct property transaction volumes in 2023, slightly ahead of the 15-year average of $5.7 billion. Since the trough in values in 2009, industrial asset values have increased by 288%.
In March, ISPT and UniSuper and acquired 280 hectares of greenfield industrial development land next to the entrance of the under-construction Western Sydney International Airport, where they will build a $4 billion logistics estate.
ISPT furthers selldown
ISPT has been busy on the sell-side. This week is put the triple-supermarket anchored Market Central Lutwyche shopping centres up for sale alongside co-owner Abacus, five years after the centre underwent a $77 million redevelopment.
In October last year, it sold the Brisbane CBD home of fast fashion giants H&M and Uniqlo, 170 Queen Street for $145 million, just as it put a portfolio of four key retail assets and an office building to the market with combined expectations tipping around $600 million.
The retail assets include Melbourne’s GPO building, The Strand Melbourne, Halls Head Central and Eastgate Bondi Junction. It has since Eastgate Bondi Junction to Charter Hall for nearly $127 million, and more recently the Coles and Aldi-anchored Halls Head Central sub-regional centre for $70 million to Centuria Capital Group, at 40% below replacement cost.
In March, it put the Coles and Aldi-anchored Dee Why Grand neighbourhood centre in Sydney to the market, which could net $65 million.
