This article is from the Australian Property Journal archive
AN institutional-grade industrial facility in Adelaide’s Gillman has sold off-market for $20 million, marking the first sales in the sector above $10 million for the quarter.
The 15,020sqm site at 113-117 Bedford Street in Adelaide’s northwest industrial precinct is occupied by an 8,894sqm facility leased to two tenants, Tyremax Pty Ltd and Plasdene Glass-Pak Pty Ltd for a WALE of 4.64 years.
Max Frohlich and Ryan Mills from Knight Frank managed the sale to Adelaide-based property syndicate Harmony Property Investments, on behalf of Trilogy Industrial Property Trust.
“Only eight industrial properties have sold for more than $10 million this year to date in Adelaide, with this sale being the ninth and the first sale this quarter so far,” said Frohlich.
Originally developed in 2018 by Frasers Property Australia in a joint venture with CIP Constructions, the asset sold at an initial yield of 5.76% and market yield of 6.01%.
“High-quality industrial properties that are well-located and leased to strong tenants with secure income are arguably the most sought-after asset class in the current market,” added Frohlich.
“The Gillman industrial facility is in a strategic location in one of Adelaide’s premier industrial precincts, with access to major heavy vehicle transport links, the Port of Adelaide and Flinders Ports international container shipping terminal located at Outer Harbour.”
The property includes an ESFR sprinkler systems, a 10-metre-high springing clearance warehouse, an office for each tenancy, cantilevered awnings on the northern side of the warehouse, on-site car parking for 43 vehicles to the southern side of the warehouse, loading docks and fully fenced hardstand areas.
“While the industrial occupier market has experienced the lion’s share of rental growth and transaction volumes have slowed nationally, it is clear industrial is still a preferred sector with several active mandates looking to place capital in our state,” said Mills.
“Now that a new benchmark has been set, and with several other deals at play, we are confident transaction activity will increase for the remainder of the fourth quarter.”
Harmony Property Investments acquired the property as a strategic addition to its Harmony Canning Vale Fund.
“With its strategic location, modern specifications, and rental growth potential, the property is well- positioned for capital appreciation,” said Tom Isaksson, head of Harmony Property’s Investments Team.
“It is also fully leased, providing solid income, and we consider there is some positive rental reversion which can be unlocked when the current leases are renewed due to the current low industrial vacancy rate of less than 2%.”
“Another drawcard for the investment was that no stamp duty is payable on acquisitions in South Australia, making purchase yields in this state more favourable compared to those in other Australian states.”
