This article is from the Australian Property Journal archive
DEXUS Industria REIT (DXI) has offloaded a Gold Coast warehouse facility occupied by Woolworths Group’s Endeavour Drinks for $66.9 million, in line with book value, as it seeks to strengthen its balance sheet.
Proceeds from the sale of the 16-28 Quarry Road, Stapylton asset will initially be used to repay debt, and in due course will be deployed into higher returning opportunities, according to DXI fund manager Alex Abell.
“In the past eight months we have contracted to sell approximately $230 million of assets, which is a great result for the fund’s balance sheet and positions DXI for future potential opportunities,” he said.
The sale will reduce DXI’s pro-forma look-through gearing by about three percentage points from 29.5%, create additional balance sheet flexibility that will assist it to develop land interests it owns in Sydney and Perth, and reduce its exposure to interest rate rises by increasing average hedging by circa eight percentage points.
The asset comprises two warehouses located three minutes off the M1 motorway, 37 minutes from the Port of Brisbane and 29 minutes to the Gold Coast CBD. The clear span column-free warehouses were constructed in 2007 and have 11.2 to 13.0 metre clearances, and recent leasing and capital expenditure initiatives have further enhanced the asset.
As well as Woolworths, tenants include AMES Australasia, a key supplier to Bunnings and owner of brands including Cyclone and Hills, and Gliders Transport.
Settlement is expected in October 2023.
Industrial sales activity fell 47% in the year to the end of March to $18.7 billion, according to MSCI, and by 82% quarter-on-quarter, in line with the broader halt to deal-making across the commercial real estate sector.
MSCI head of Pacific real assets research, Benjamin Martin-Henry has said price discovery has become more and more challenging for both buyers and sellers, resulting in restraint in the market.
