Investec Australia Property Fund has added a new industrial property to its portfolio after spending $19.45 million in Dandenong South.
The site, which is currently fully occupied by a subsidiary of national milk and juice packager Pact Group Holdings Ltd, represented a yield of 6.3 per cent at the time of purchase.
It took the value of the fund’s total portfolio to $967 million.
The property is situated at 36-42 Hydrive Close, 32 kilometres south-east of the Melbourne CBD in one of the city’s most established industrial precincts.
Related reading: Investec Looking to Replicate Adelaide Affordable Housing in NSW
“The property is a well-located, high quality industrial facility that provides a sustainable income stream for investors,” Investec Australia Property Fund’s chief executive Graeme Katz said.
“The property complements the acquisition of 6-8 and 11 Siddons Way in the neighbouring suburb of Hallam completed in late 2017,” Katz said.
“Dandenong South is a prime industrial precinct evidenced by the quality of occupiers including Amazon, Carter Holt Harvey, Toyota, Swire Cold Storage, and Bosch.
“The property is occupied by a tenant that is part of an extremely strong ASX-listed group under a long-term lease with 7.1 years to run.
Significant major infrastructure projects are expected to further improve the site’s connectivity and accessibility, such as the Westall Road Extension, the $100 million North-East Link and the $300 million Moordialic Bypass.
“The acquisition is accretive for the fund and will be funded by utilising the fund’s existing debt facility. Post the acquisition the Fund will be geared to 37.6 per cent with a weighted average cost of debt of 3.71 per cent per annum and hedged to 86.4 per cent for an average of 6.2 years.”
Settlement of the Dandenong South property is due to on 19 April 2018.
The investment bank has also recently registered its interest with NSW’s Communities Plus program to develop a residential precinct in Redfern. Investec recently completed a “rent-then-buy” affordable housing project ahead of schedule in Adelaide as it eyes opportunities for affordable housing in NSW.
Investec reportedly registered its interest in the NSW Communities Plus 1.1-hectare site at Redfern, located at 600-660 Elizabeth Street.
The $22 billion NSW Communities Plus program expects to deliver 23,000 social and 500 affordable homes by 2026.
