This article is from the Australian Property Journal archive
WESTERN Australian fund manager, Westbridge Funds Management, has spent more than $30 million acquiring a high-grade manufacturing facility in Brisbane which will seed a new industrial real estate fund.
The Westbridge Industrial Opportunity Fund Fund aims to deliver a total return comprising monthly income distributions plus potential for capital uplift, with a targeted internal rate of return of 11% to 13% .
Its first asset is 46-50 Unwin Street in Pinkenba, nine kilometres north-east of the Brisbane CBD and was acquired for $30,510,000 through selling agents Dan Munnich and Michael Callow of CG Property. The property is on two hectares of land and is occupied by HMG Hardchrome, part of global conglomerate Sime Darby Berhad.
Simon Worth, Westbridge’s head of capital transactions, the fund is “focusing on a strategic blend of income-generating properties and assets that offer value-add potential through leasing, repositioning, and/or development”.
“The Pinkenba facility offers a highly attractive location in one of Australia’s most sought-after industrial precincts with close proximity to the Brisbane CBD, Brisbane Airport and Port of Brisbane.
The land-rich asset is on a 20,023 sqm site with three street frontages, with the underlying land underpinning a significant portion of the total asset value.
“Facilities of this kind are difficult and costly to replicate, and hence experience strong pent-up demand from both tenants and occupiers,” Worth said.
The Pinkenba facility offers a regular income stream through its existing lease covenant as well as the potential to add value through repositioning the asset in the medium term, Westbridge believes.
It says the industrial market will continue to benefit from multi-faceted demand as growth in online retailing and an increased focus on local supply and manufacturing chains drive demand for warehouse space.
Damian Collins, chair of Westbridge, said, “We are continuing to see exciting prospects in the industrial sector, especially in the mid-sized market where tenant demand is strong and supply is especially tight.
“This market segment has additional appeal to us as it tends to be outside the price scope of most smaller investors, and is below the usual range for institutional investors, meaning more opportunities for entities such as Westbridge Funds Management to acquire quality assets.”
This is Westbridge’s first open-ended fund. It is now open to wholesale investors, and has a minimum investment of $100,000, with $10,000 for additional investments.
A decision in 2017 by Westbridge to focus on Melbourne’s growing appeal as an industrial hub has just paid off. Westbridge divested a warehouse asset in the western industrial suburb of Ravenhall for $18 million, having acquired it in 2017 for $8.86 million.
In a similar sequence of events, in August it sold a 10,056 sqm warehouse facility at 22 Salta Drive in Melbourne’s Altona out of the MPS Diversified Property Trust for $30 million, well above the late 2017 purchase price of $11.5 million.
