This article is from the Australian Property Journal archive
REAL estate fund manager Altis Property Partners has picked up a 12,000 sqm multi-tenanted industrial complex in Brisbane’s TradeCoast precinct for $32.5 million.
The 112 Cullen Avenue, Eagle Farm property will be held in the diversified Altis Real Estate Equity Partnership 4 fund (AREEP4), one of two funds for which Altis secured $600 million in new equity commitments from two global institutional investors in November, giving it the capacity to target $1.2 billion worth of value-add and counter-cyclical Australian real estate.
Leased to six tenants and anchored by Brisbane City Council, 112 Cullen Avenue is about five kilometres north of the Brisbane CBD in the TradeCoast industrial hub that is Queensland’s second largest employment zone outside of the Brisbane CBD. The property is located within the Northshore Hamilton Priority Development area that will undergo significant redevelopment and infrastructure investment over the next decade to accommodate the Brisbane 2032 Olympic Games Athletes Village.
Brisbane City Council chose the site for its location between Brisbane airport and Brisbane CBD, and access to the major Brisbane and inter-state transport hubs.
“We are thrilled to add this asset to Altis’ diversified AREEP4 fund due to its diversified income and near term positive rental reversion opportunity due to the short weighted average lease expiry (WALE),” said James King, director investment management and capital at Altis said.
“This acquisition reflects the exact type of asset the fund is targeting with the ability to access value by increasing the net rental income and extending the WALE in a tightly held precinct with the lowest vacancy rate of circa 0.6% in the Brisbane industrial market.
“Despite the headwinds caused by the inflationary environment we find ourselves in, we feel strong supportive fundamentals remain for the industrial sector at the right entry prices.”
Shaun Hannah, executive director at Altis, said, “We are at a key juncture in this new real estate cycle, having to adjust to the higher interest rate environment and construction cost pressures that we have been experiencing”.
“One of our biggest challenges is filtering the current heightened volume of deal flow to find the best relative value opportunities for our investors, particularly in the industrial and residential sectors.”
Gareth Price, director capital transactions at Altis said that one of the key characteristics which attracted Altis to the asset is the benefit from the future infrastructure investment in the precinct.
AREEP4 is focused on value-add industrial, large format retail, and counter-cyclical office investments and has already acquired a $31.5 million industrial warehouse with development potential in Perth’s Hazelmere.
Altis was acquired by global investment manager Barings in August.
Since 2011, Altis’ value-add funds have outperformed the MSCI Australia Annual Property Index on average by over 450 basis points and in some fund vintages, Altis has delivered 100% outperformance above the index.
