This article is from the Australian Property Journal archive
REAL estate financier MaxCap Group and joint venture partner Time & Place have taken advantage of prime industrial land values by selling a $350 million Villawood industrial development project to Brookfield.
Located off Woodville Rd, which links the major arterial M4 and M5 freeways, the 2 Christina Road Villawood in Sydney’s inner west was Orica’s former explosives site and was acquired by the MaxCap Industrial Opportunity Fund (MIOF) and Time & Place in May last year for $70 million.
Brookfield reportedly paid $90 million. The 12.6ha land parcel was sold with a planning permit for 70,000sqm of prime-grade, environmentally sustainable logistics estate with an end value of $350 million.
MaxCap head of direct investment Simon Hulett said the divestment of the site was aligned with the trading nature of the Fund and highlighted the unique capability and expertise of the MaxCap and Time & Place joint venture partnership.
“When we launched MIOF in 2019 with Time & Place, the investment thesis centred around taking advantage of the structural shift in Australian industrial land markets, specifically the growth that we forecast in industrial land values in core locations. It was about buying well, adding value and opening up divestment options through development, subdivision or englobo sale. Villawood is a prime example where we bought land extremely well in a super prime infill location in Sydney – the tightest market in the country. It was a complex site to acquire given its background but it was this complexity that created the value and the Time & Place team did an outstanding job of managing this. It’s a terrific outcome for our fund’s investors.” Hulett said.
Chris O’Keefe, director of Time & Place Commercial added: “We were initially attracted to the Villawood site due to its accessibility to major transport networks, size and location. Consistent with the mandate of MaxCap and Time & Place industrial fund, we are delighted to have added value through acquiring development approvals, and to have found a high calibre purchaser in Brookfield to take the site forward within its industrial portfolio. As the demand for industrial lots across the east coast of Australia continues to grow, we are passionate about acquiring sites like this that we are confident will deliver long-term value in a rapidly shrinking market.”
This transaction will give the industrial sector a boost after deals declined Q3 due to a lack of opportunities.
It is also timely as trends show industrial property values have peaked and there are expectations there will be a repricing of industrial assets on the horizon, in light of rising interest rates.
In Australian Property Journal’s latest Talking Property Podcast, Benjamin Martin-Henry, Head of Real Estate Research, Pacific with Real Capital Analytics (MSCI), said bond rates and industrial yields spread have narrowed significantly from 300 basis points to 25 bps.
Brookfield head of real estate investments Ruban Kaneshamoorthy said: “We are pleased to have acquired our first Sydney logistics asset in the important central western Sydney hub of Villawood providing an optimal middle and last mile logistics offering to ecommerce retailers looking to service their customers.
“There is a scarcity of such facilities in Sydney’s infill market and this asset will help relieve some of those supply constraints while offering strong connectivity to key transport and road infrastructure. We look forward to working with Time & Place on this investment and expanding the relationship.” Kaneshamoorthy said.
The deal was brokered off-market by CBRE is due for completion in Q1 2024.
