This article is from the Australian Property Journal archive
ASX-listed Growthpoint has offloaded an industrial facility in Melbourne’s east for $22 million, at 13% above book value, soon after cashing on in its investment in the Dexus Industria REIT to focus on growing its core logistics platform, while its Woolworths distribution centre in Perth is set for a $50 million expansion.
Growthpoint last month announced the partnership with the diversified credit and real estate investing platform within TPG Inc, which will see the global institutional capital partner to acquire a circa 80% interest in a portfolio of six existing Growthpoint industrial assets at book value. The sale will realise $181 million in net proceeds.
In Knoxfield, it has just offloaded 3 Millennium Court, an 8,040 sqm office and warehouse on a 14,750 sqm site. Opal Packaging occupies the entirety of the facility, which had a 1.7 weighted average lease expiry (WALE) as of June, a book value of $19.4 million and a capitalisation rate of 5.25%.
The sale represents an unlevered internal rate of return of 14.0%.
In the September quarter, WALE across the portfolio has increased to 5.8 years, with occupancy stable at 93%. It has secured 11 new leases, including eight new customers and three renewals, covering over 96,000 sqm and representing 5.5% of our portfolio income.
Its office portfolio has maintained a consistent WALE and occupancy rate compared to FY24, following nine leases in the quarter, representing 1.6% of office portfolio income, with an average lease term of 5.3 years and a 3.5% average rent review.
Occupancy in the industrial portfolio slightly decreased to 98%, but the WALE increased to 5.3 years, driven by a five-year lease extension with Woolworths at its Perth Regional Distribution Centre, which will see the supermarket giant extend its tenure to October 2030.
Growthpoint has agreed to expand the distribution centre, with the works to be partly funded by Growthpoint. The expansion will increase the total gross lettable area of the property by over 13.4%, and the lease will then be extended to a 10-year term from practical completion of the works, targeted for October 2026.
“Securing this renewal and expansion for approximately 3.8% of the portfolio’s income addresses a major expiry for FY26 and builds on a long-standing relationship with Woolworths, one of Growthpoint’s major customers who account for 12% of portfolio income,” Growthpoint said.
The majority of the $50 million of expenditure is expected to be incurred in FY26.
