Perth-based fund manager Mair Property Funds (MPF) has entered into agreements to acquire two commercial properties in Melbourne for $20.3 million in two off-market deals.
The properties are located in Ravenhall and Altona North in Melbourne’s west, and will form part of MPF’s Diversified Property Trust, which already holds commercial assets in Western Australia, Queensland and Victoria.
The Ravenhall property, in the Orbis Business Park, is a modern industrial facility constructed in 2010 and located 22 kilometres west of Melbourne CBD with a land area of 13,930 square metres. The 6,888 square metre building is occupied by Australian Pipe and Tubing with a 15-year lease until 2031.
The Altona North property is an industrial warehouse built in 2008 and located 13 kilometres south west of Melbourne CBD with a land area of 18,410 square metres. The 10,056 square meter building is occupied by Grace Records Management with a recently agreed 8-year lease that expires in 2025.
MPF acquisitions manager Peter Melling said the two high-quality assets were identified for their favourable locations and strong lease agreements, which would help bolster the trusts revenue security and income diversity.
“Altona is becoming an increasingly important logistics hub due to its proximity to the Melbourne Port and access to the Princess Freeway and Western Ring Road,” Melling said.
“Both properties also offer strong lease covenants with reliable tenants providing investors with a steady income stream.”
Upon completion of the acquisition, the properties will be included in MPF’s Diversified Property Trust, which already holds four commercial assets in three states.
These include a retail premise in Maroochydore (Queensland), a medical facility in Ellenbrook (Western Australia), an industrial premise in Henderson (Western Australia) and a retail industrial premise in Lynbrook (Victoria).
All assets in the trust are 100% leased and provide strong income streams offering a weighted average lease expiry (WALE) of 7.2 years from 17 tenants.
The Diversified Property Trust is open to retail investors with the minimum investment starting at $50,000. The fund offers investors 8% annual distributions (paid quarterly) as well as capital growth of the assets.
The trust was established to offer investors a sustainable income with the potential of future growth, and has targeted commercial properties in high-profile locations with strong lease covenants.
The acquisition of the Ravenhall and Altona North assets takes the value of properties under management by MPF to $208 million as the company continues to grow its funds to meet investor appetite.
