This article is from the Australian Property Journal archive
MORE than $70 million is expected for an inner Sydney industrial complex occupied by blue-chip tenants that include Elon Musk’s Tesla and the Seven Network.
The modern freehold at 118-124 Bourke Street in southern Alexandria has 9,909 sqm of building on a 12,530 sqm landholding in close proximity to Sydney Kingsford Smith Airport, Port Botany and WestConnex Motorway, as well as the M1 and M5 Motorways.
Electric vehicle giant Tesla has a repair centre at the facility, while Seven uses it for storage.
The property is listed with the Colliers’ Michael Crombie, Trent Gallagher, Gavin Bishop and Sean Thomson, as well as the CBRE agents Jason Edge, Nathan Egan and Shaun Timbrell, who are representing a private vendor.
“Rarely do we see an investment within prime Alexandria of such strength boasting occupiers being Tesla Motors and Seven Network, enormous underlying rent reversion, superior power supply, in an ever evolving precinct,” Crombie said.
The property has a weighted average lease expiry by income of 4.2 years, offering potential for value enhancement through a variety of core plus and strategic re-leasing initiatives in the medium term, as well as multiple exit strategies in the future.
“Positioned on one of South Sydney’s main arterial roads, the location will continue to be a massive drawcard in attracting future tenants, allowing the purchaser to capture future rental uplift,” Gallagher said.
The location has heightened occupier demand within the Sydney industrial market. Sydney’s vacancy rate was just 2.4% at the end of the June quarter, well below the market equilibrium of 4.0%.
Gallagher said the location and planning controls open up further potential to reposition the asset through refurbishment or redevelopment.
“Alexandria is in a continual phase of gentrification which allows for excellent capital growth potential.”
South Sydney stands to benefit from a transport infrastructure pipeline of $72.3 billion, including stage one of the M6 Motorway and the Sydney Gateway, both forecast to be completed in 2025.
Egan said Alexandria offers a mix of amenity, lifestyle, and entertainment that appeals to many creative and customer focussed industries.
“It’s a market that is always in extremely high demand from tenants looking to locate close to their main customer base and attract and retain employees.”
Expressions of interest close 1st October.
Elsewhere in Alexandria, a renovated heritage-listed building on a low-coverage site at 40a-42 Maddox Street was put to the market in May with expectations of $20 million.
The property improved by a 2,480 sqm industrial workspace and is offered with a short-term holding income with huge rental reversion potential, with a possible net market income of $1,420,000. The site spans 5,615 sqm of land with E3 productivity support zoning and ample car parking.
Earlier in the year, pan-Asian self-storage owner and operator StorHub Group netted $460 million in equity commitments to launch into the Australian market, with a development in Alexandria among the seed assets.
