A $250 million plus pure Sydney industrial portfolio is expected to attract significant interest among private, institutional and offshore buyer groups when it hits the market next month.
Colliers International’s Gavin Bishop and Tony Iuliano, in conjunction with Chris O’Brien and Matt Haddon of CBRE, have been appointed to sell a six-asset, 150,000sqm portfolio of prominently located and tenanted industrial properties in and around Sydney.
“This is the best medium-sized industrial portfolio to be offered to the market in many years, and it is 100% weighted to Sydney which makes it extremely rare,” Mr Bishop said.
“This alone would make it highly appealing to a wide range of buyer groups.”
All assets within the portfolio also have highly sought after locations close to key road and investment project infrastructure.
All properties fall within recognised institutional investment-grade locations popular with both private and institutional investors.
“The portfolio overall has a strong WALE of 6.75 year, with 43% of the portfolio having a lease expiry beyond 2020, providing strong security of income,” Mr Haddon said.
“55% of the net income is evenly balanced between four out of the six assets, and the tenancy profile overall is very strong.”
The portfolio comprises six assets located in the following suburbs:
- Huntingwood: A modern warehouse and distribution facility with easy access to the M4 and M7 Motorways. Leased to long term tenant, DHL.
- Minchinbury: A high quality, functional warehouse facility with excellent access to the M4 and M7 Motorways, leased to Star Track Express.
- Villawood: A functional warehouse and manufacturing facility leased to Pact Group
- Fairfield: This asset is considered the best logistics facility in Fairfield, leased to Fantastic Furniture and DB Schenker.
- Kingsgrove: A modern office-warehouse facility, with easy access to the M5 Motorway and 10 minutes from the Port of Botany. Leased to Shriro Australia.
- Blacktown: A highly functional warehouse and manufacturing facility to Snack Brands, close to the M7 Motorway.
Mr O’Brien said 51% of tenants are ASX-listed, 25% are multinational companies and 24% are major corporate occupiers.
Mr O’Brien said the industrial investment market was performing strongly off the back of offshore investment and positive investment conditions.
“The fundamentals for attracting investment into core real estate have continued to improve over the past 12 months, helped by foreign investment in global gateway cities such as Sydney, which provides secure income over the longer term, and Australia’s ongoing position as part of the Asian economy,” he said.
Mr Iuliano said base interest rates are at an all time low, greatly enhancing levered returns and resulting in investors enjoying the benefit of significant positive cashflow spreads. Not withstanding the low rates, property yields remain at historic highs compared to long-term bond rates.
“We know various offshore groups are looking for large portfolios to acquire to establish a platform in Australia, as recently witnessed with the GIC/Australand and McPhee portfolios.
All of these factors combined will see strong interest levels for this outstanding pure Sydney industrial portfolio.