This article is from the Australian Property Journal archive
DEXUS Property Group has sold an industrial property at Erskine Park in Sydney, after recently securing DB Schenker as the tenant.
The property at 94-106 Lenore Drive Erskine Park was sold off-market for $28 million, reflecting a capitalisation rate of 8.15%.
Upon settlement, the transaction will generate approximately $3.1 million in trading profits for FY12. The combination of the $1.4 million trading profit realised from selling part of the site in July 2011 results in a total project profit of approximately $4.5 million and a total project IRR of 22.3%.
General manager of developments Andrew Whiteside said the sale is consistent with the group’s strategy.
“In only a 22 month timeframe we acquired the land, sub-divided it for part sale, obtained planning approval, speculatively developed the remaining land parcel, leased the completed property to DB Schenker and sold the property at a profit,” he added.
The Erskine Park facility is the second development to be sold this financial year, following the sale of a development for Loscam at Distribution Drive in Laverton North, Victoria, in October 2011, which generated a $1.3 million trading profit.
As a result of this sale, the total trading profits secured by the active business for FY12 amount to approximately $5.8 million, exceeding the target of $4.0 million set in August 2011. The FY12 FFO and distribution guidance remains unchanged.
“This sale demonstrates the team’s success, commitment and ability to generate trading profits in our active business through the development of quality industrial properties. Being able to exceed our targeted trading profits for the financial year is an excellent result and emphasises our focus on enhancing returns for investors,” CEO Darren Steinberg said.
Property Review
