This article is from the Australian Property Journal archive
UNISUPER has put its faith in the industrial market to keep the good times rolling, acquiring a half-interest in a 20-asset portfolio of warehouse and logistics facilities across Sydney and Melbourne in a deal worth over $500 million.
While transaction volumes have slowed, industrial property remains the star performer of the major commercial real estate sector classes, experiencing a major boom since the beginning of COVID as online shopping surged and companies scrambled to optimise their logistics operations. Property professionals have earmarked the sector for the highest capital and rental growth.
Of UniSuper’s newly-acquired portfolio assets, 12 are located in the Quarry Industrial Estate in Greater Western Sydney, and the remaining eight assets are in the core western Melbourne industrial market of Truganina.
The 340,000 sqm portfolio is underpinned by tenancy profile headlined by major companies such as Coles, Toll, Northline, Roche, Blackwoods, Symbion, and UPS.
UniSuper will invest alongside existing co-owners Dexus and Blackstone in this venture.
“We are delighted to acquire this high-quality portfolio of stabilised income-producing assets to complement our existing industrial development pipeline in the strongly performing logistics sector,” said Nick Stephens, senior manager property at UniSuper.
The investment adds to its $7.3 billion unlisted property portfolio.
“The transaction highlights UniSuper’s ability to transact swiftly without the need for debt funding or regulatory approvals. As genuine long-term investors, we continue to look for unique opportunities that help our members grow their retirement savings,” Stephens said.
The acquisition was negotiated on behalf of the $120 billion superannuation fund by real estate investment management firm Richmond Bridge under an industrial property investment mandate, while Cushman & Wakefield’s Tony Iuliano and Adrian Rowse represented the vendor, the National Pension Service of Korea.
Peter Wylie, chief investment officer at Richmond Bridge, said, “We are pleased to have successfully concluded this transaction, capitalizing on a market with fewer buyers, which allowed us to secure these high-quality assets at an attractive entry price.
“When presented with the opportunity to assess this portfolio for UniSuper, we did not hesitate, recognizing the rarity of such offerings in the market.”
In Australian Property Journal’s latest Talking Property podcast, MSCI’s head of real estate research, Pacific, Benjamin Martin-Henry said the first quarter transaction volumes were the lowest since 2012, as buyers and sellers maintained a standoff on values.
The industrial sector’s strong fundamentals should limit the impact of higher interest rates on values in the same way the office and retail sectors have been hit, according to a note from Fitch Ratings’ latest Australian REITs Monitor.
