This article is from the Australian Property Journal archive
THE Dexus Industria REIT (DXI) is offloading two warehouses in the Melbourne suburbs of Kilsyth and Dandenong for a combined $45 million, just above book value, in a portfolio optimisation play.
The 32-40 Garden Street asset in Kilsyth, in the suburbs, is netting total proceeds of $31.5 million following what DXI said was a series of proactive management initiatives to secure vacant possession and reposition the property.
Over time the existing premises have been expanded and renovated, with 7,200 sqm of the total 10,647 sqm gross lettable area having been constructed in 2007. A modern two-storey office building and an adjoining high-clearance warehouse were retained and have now been supplemented by factory, warehouse and hardstand additions. There is also circa 11,500 sqm of vacant land available for future expansion to the rear of the property and there is an on-site car park providing approximately 150 car spaces.
In the south east, 57-67 Mark Anthony Drive in Dandenong sold for $13.5 million.
That property comprises of 7,830 sqm of warehousing with drive-around B-double access, high clearance and multiple cranes. The tenant is U-Neek Bending, a steel fabrication business established in 1964 specialising in defence, infrastructure and energy projects.
The assets have a 30th June combined book value of $44.74 million.
“These sales progress DXI’s strategy of improving portfolio quality and enhancing risk-adjusted returns through active asset management,” said Alex Abell, DXI fund manager.
“The sales reduce look-through gearing by circa 2 percentage points, and further improve redeployment optionality into other opportunities including the development pipeline.”
Settlement of 32-40 Garden Street, Kilsyth, Victoria is expected in December 2023, while settlement of 57-67 Mark Anthony Drive, Dandenong, Victoria is expected in January 2024.
According to the latest MSCI Real Assets data, industrial sector sales fell 50% year-on-year during the September quarter to $3.0 billion.
