This article is from the Australian Property Journal archive
ING Industrial Fund has bought two industrial properties in Spain and France for $A118.8 million.
In addition, IIF has committed to building new industrial facilities on existing sites in Sydney at a cost of $49.2 million excluding land.
The industrial properties were recently constructed and are 100% leased to substantial European companies.
The properties are being acquired on an initial yield of 6.8% and the development projects 8.1%, resulting in a combined initial yield of 7.3% post transaction costs.
"The acquisitions enable IIF to continue its expansion into key industrial markets in Western Europe following the fund’s recent investment in Germany. The assets have also been sourced through ING Real Estate’s global platform, which allows IIF to invest in major offshore markets with local knowledge and expertise,” IIF chief executive Paul Toussaint said.
"The acquisitions are consistent with management’s strategy to continue to diversify its property portfolio in Western Europe’s major logistics markets.
"Paris and Madrid are an integral part of the logistics landscape in Europe and we are pleased to secure such high quality properties to commence our expansion into these core markets. The properties are as new, leased to substantial European companies and situated in prime locations with excellent access to major motorways,” he added.
The acquisitions will be funded via a combination of equity and Euro dollar denominated debt and the development projects will be 100% equity funded. An institutional bookbuild will be undertaken by J.P. Morgan Australia Limited to raise $90 million.
A portion of the proceeds from the placement and the UPP will be used to fund several industrial facilities totalling 55,360 sqm, which form part of IIF’s existing development pipeline.
Commitments to lease industrial facilities have recently been announced, including Electrolux and Criterion furniture at Moorebank Business Park and Armaguard at Rosehill Industrial Estate.
Toussaint said following further leasing success at Rosehill Industrial Estate where leading manufacturer and distributor, Ryobi has leased Building B, comprising 8,852 sqm, the fund will proceed with the construction of Building C, to comprise 29,420 sqm.
Capital expenditure required to construct Buliding C will be $22 million, with construction scheduled for completion in January 2007. The initial yield on total development costs of $36.8 million is estimated to be 8.1%.
The fund has enjoyed further leasing success across the portfolio resulting in an increase in the portfolio occupancy level to 99.7%.
Transactions totalling over 40,000 sqm have been completed in recent months, including The Park in North Ryde, 100% leased, Riverwood Business Park, 78% leased, and Rosehill Industrial Estate,100% leased.
Toussaint said the fund is experiencing strong enquiry for the remaining 5,000 sqm across IIF’s property portfolio.
By Adam Parsons
