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Forza Cashes in Melbourne Industrial Assets for $79m

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Melbourne-based property fund manager Forza Capital has taken advantage of the continuing surge of investment in the industrial sector, offloading two industrial assets in the city’s west for a combined $79 million.

The properties, in Blackburn, were sold to Sydney-based fund manager EG at a combined sale yield of 4.88 per cent.

The first property, at 15-33 Alfred Street, comprises a 21,900sq m industrial facility on a 4.14ha site.

The property, which was sold for $59.4 million through Colliers, is multi-tenanted and features a new 2400sq m purpose-built rock climbing facility leased to Urban Climb under a 10-year agreement.

It is within walking distance of Blackburn train station, and major arterials including the Maroondah Highway, Blackburn Road and the Eastern Freeway.

Forza Capital director Adam Murchie said the fund manager had raised $21.3 million of equity from wholesale investors in order to pick up the property and had “married” it with its conservative gearing strategy.

“In the early years our focus was to secure extensions from existing tenants, refurbish and release vacant space and extend the weighted average lease expiry,” Murchie said.

“Once the asset was stabilised we pursued a strategy to expand on undeveloped land which saw Urban Climb [build a new facility] on an under-utilised portion of the site.

“The totality of these improvements made for an attractive, institutional grade investment.”

▲ A portion of the site at the Alfred Street facility is partially currently under construction for incoming tenant Urban Climb.
▲ A portion of the site at the Alfred Street facility is partially currently under construction for incoming tenant Urban Climb.


The second property, at 6-16 Joseph Street, a 6100sq m industrial facility on a 1ha site, sold for $19.5 million in a transaction managed by CBRE.

It marks a significant return for Forza after purchasing the property in early 2019, in conjunction with a high-net-worth family, for $11 million.

For EG, founded and led by Adam Geha and Michael Easson, the transactions cap off a busy year, raising $1.25 billion of equity and securing 20 assets totalling $1.7 billion.

The assets are the the eleventh and twelfth assets acquired for EG ACE, an open-ended, diversified fund that seeks to reposition assets to core, targeting office, industrial and retail real estate in Australia.

The active fund manager now has $4.3 billion in assets under management on behalf of super funds and private wealth clients.

EG ACE executive director Chris Pak said the Blackburn assets were prime examples of urban industrial assets, offering good access to high-density catchments and large populations.

“The latest ANREV data is showing us that Sydney and Melbourne logistics are the most sought-after asset class across the entire Asia Pacific region so investment success requires a proactive approach on the ground that EG is well equipped to deliver,” Pak said.

EG’s focus on high-quality industrial assets comes as record volumes of investment capital continue to flow to the industrial sector with investors pushing up prices through acquisition and development activity.

Melbourne has led the way on tenant activity, accounting for 50 per cent of national gross take-up in the past year. Yields have also tightened by 125 basis points to 3.5 per cent.

The city has absorbed a near doubling in supply this year, when measured against historic averages, with vacancy rates now at 1.3 per cent.

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Article originally posted at: https://www.theurbandeveloper.com/articles/forza-capital-eg-funds-blackburn-industrial-transactions