This article is from the Australian Property Journal archive
GPT has confirmed it is in exclusive due diligence to acquire an Ascot Capital portfolio of warehouses and offices for more than $800 million in what looms as Australia’s next major industrial deal in 2021.
The ASX-listed group addressed the media speculation swirling over the weekend the deal measured “approximately $800 million” and comprises 26 logistics and industrial assets, together with four office assets.
The transaction is expected to represent a yield of about 4.4%.
Australia saw its biggest-ever property transaction earlier this year with ESR and GIC’s $3.8 billion purchase of Blackstone’s Milestone logistics portfolio of 45 assets nationwide, on a circa 4.5% yield including the management business.
Soon afterwards, Blackstone offloaded a 90% stake in the Fife industrial portfolio for about $850 million to PGIM Real Estate and Manulife, while Logos led a consortium that bought the country’s largest intermodal freight facility, Sydney’s Moorebank Logistics Park, for $1.7 billion.
GPT, which also released its interim results yesterday, saw its logistics portfolio recorded $314.7 million or a 10.6% valuation increase in the six months to the end of June, to now total $3.4 billion. The weighted average cap rate firmed 46 basis points to 4.38%.
Occupancy for the logistics portfolio was 96.8%, with 58,900 sqm of leases signed in the period, taking the WALE to 6.6 years while rent collections for the first half were 100% of net billings.
“The tightening of valuation metrics reflect unprecedented levels of investor demand,” it said.
GPT QuadReal Logistics Trust acquired two fund-through developments in Melbourne totalling approximately $270 million, and land in Brisbane’s south west for future development, while an additional eight hectare land parcel was secured at the southern Brisbane suburb of Crestmead
GPT’s $51 million development in Glendenning in New South Wales completed in February and is leased to Total Tyres for a 10-year term. It also purchased an adjacent land parcel on Mamre Road, taking its land holding at Kemps Creek in Western Sydney to 37.2 hectares.
Four industrial developments will be completed during the second half, including a 16,300 sqm facility at GPT’s Berrinba estate in Brisbane which achieved practical completion last month.
The group’s development pipeline has an expected end value on completion of approximately $1.4 billion, giving the logistics portfolio a growth pathway to approximately $5 billion.
Net profit after tax across the entire group was $760.5 million, compared to the $520.4 million loss in the same period last year.
Industrial revaluations underpinned the total 3.3% rise of $471.7 million. Weighted average capitalisation rate firmed 10 basis points to 4.85%
Interim distribution per security lifted 43% to 13.3c.
Funds from operations of $302.3 million resulted in FFO per security of 15.64c, an increase of 24.6%. GPT had withdrawn its FFO guidance amid an extended lockdown periods in the major Sydney and Melbourne markets, impacting its Melbourne Central centre in the CBD that is heavily reliant on office workers and tourist visitation. Portfolio occupancy was 98.9% and 412 leasing deals were completed, with a negative leasing spread of 9.4%. It said total centre sales were up 5.0% and total specialties sales up 6.5%, compared to the same period in 2019.
Revaluations across the retail portfolio saw a 0.6% uplift. WACR was stable at 5.05%.
Deals achieved fixed rental increases averaging 4.4% and an average lease term of 4.5 years.
Its office portfolio recorded a net valuation increase of $121.2 million or 2.2%, as the WACR was stable at 4.87%. Occupancy for GPT’s $5.8 billion prime grade portfolio was 88.9% at Occupancy excluding these recent development completions was 92.0%. GPT completed office projects 32 Smith in Parramatta and the 34,000 sqm Queen & Collins in Melbourne, the latter of which is 41% committed.
Rent collections for the first half were 100% of net billings.
Leases totalling 37,900 sqm were signed in the period, with an additional 23,200 sqm of heads of agreement in place. The portfolio WALE is 5.0 years.
