A freestanding investment opportunity at Hemmant in the Australia Trade Coast precinct in Brisbane’s east has been sold by Ray White Commercial for $1.7 million, setting a record yield for the area.
The tenanted warehouse/office on an approximately 810 sqm site at 49 Canberra Street, Hemmant, was sold off-market to a local investor by Ray White Commercial TradeCoast’s Jared Doyle on behalf of a private local developer.
“This sale reflects a 7.0 per cent net return, which the valuers tell me is a new record for the area,” Mr Doyle said.
“I believe this is a reflection of the current investor demand we are experiencing with official interest rates remaining at record lows. A 7.0 per cent yield is the new 8.0 per cent.”
The complex which includes an approximately 458 sqm clear span warehouse and approximately 276sqm of office and training area is leased to Life and Rescue International Pty Ltd – a subsidiary of global shipping company Wilhelmsen Group – on a 5+5 year term of $120,000 per annum.
“The property was sold for the asking price of $1.7 million as an off-market deal,” Mr Doyle said.
“I made one call to an investor I knew was in the market on a Monday, inspected it with them on the Tuesday and had an unconditional contract in front of the owner at his asking price on the following day.
“Knowing the long term tenant is a subsidiary of one of the world’s largest shipping companies, provided the Investor purchaser with a great deal of comfort in pursuing the asset, particularly on this tight yield basis.”
The fully fenced and gated property is located near the Gateway Motorway and is in close proximity to Brisbane Airport and the Port of Brisbane.
“The property’s location in the Australia Trade Coast precinct was an attractive feature as it is fast becoming one of the most dynamic business locations in Australia,” Mr Doyle said.
Charter Hall Files Medical Distribution Centre Plans
Charter Hall is moving ahead with plans to develop a 4.8ha site in west Sydney, lodging plans for the Compass Logistics Estate as the group grows its industrial holdings in the area.
The latest plans for the Blacktown site includes a medical-based warehouse and distribution centre at Lot 1 Eastern Creek Drive, Eastern Creek.
The plans by Qanstruct feature 21,350sq m of warehouse, 500sq m forklift charging area, 1750sq m of office, 14 loading docs and 184 car parking spaces, to be operated all hours.
There would also be a concrete vault for the storage of “controlled drugs”, chillers to reduce operating temperature and secondary packaging rooms for pharmaceutical products.
“The proposed warehouse will be used for general storage and distribution of pharmaceuticals, medical devices and health food products and other related products which will need to be maintained between 15 to 25 degrees Celsius,” the application said.
The ASX-listed company purchased the land as part of a larger 6ha site for $35 million in 2018 to maximise its land bank close to critical infrastructure. The purchase was made through a joint partnership between Charter Hall Prime Industrial Fund and Core Logistics Partnership.
In mid-2021 the fund also acquired the 90-year leasehold for 35ha of industrial land at Light Horse Business Club in the same region from the Western Sydney Parklands Trust.
The five-year development agreement would see Charter Hall develop the estate with a gross lettable area of 170,000sq m and an on-completion value in excess of $300 million.
CPIF fund manager Richard Mason said it was their strategy to acquire and develop well located sites close to major transport infrastructure with easy access to large consumer markets.
“The momentum in demand for strategic located industrial space is seeing record leasing activity, particularly for larger automated purpose-built facilities,” Mason said.
“The shortage of zoned, ready to develop land, provides the opportunity to further expand our modern logistics portfolio.”
The industrial market in Eastern Creek is rapidly expanding with infrastructure investments in Sydney’s western growth corridor including WestConnex tunnel project and the Western Sydney Aerotropolis.
Article Source: www.theurbandeveloper.com
Brisbane Lining Up for Record Industrial Build
After capping off a record $2.3-billion year of transactions, Brisbane’s booming industrial sector is tipped to double its pipeline this year.
It is the third consecutive year the city has broken its transaction record.
A CBRE report on the city’s industrial and logistics results in the fourth quarter showed a strong appetite for speculative developments, as investors looked to capitalise on occupier demand.
CBRE head of industrial and logistics research Sass J-Baleh said 37 per cent of developments in 2021 were speculative, while this year almost half of development in the pipeline would be speculative.
“New supply is forecast to increase significantly in 2022 and reach around 683,669sq m—surpassing the 10-year annual average and over double the 2021 total,” J-Baleh said.
“Approximately 64 per cent of the 2022 supply pipeline is already under construction.
“There is a relatively large supply of speculative floorspace due for completion in 2022, with 325,705sq m set to complete in the year as investors look to capitalise on cheap debt and deploy significant amounts of capital in the booming sector.
“With a lack of investable stock available on the market, it is expected that investors will continue the trend towards building speculative supply, on the back of expectations of further occupier demand.”
Brisbane industrial financial indicators
|Region||Prime Net Rents – Q4 (per sqm)||Prime net rents – YoY change||Prime market yield – Q4||Prime market yield – YoY change|
^Source: CBRE Brisbane Industrial and Logistics 4Q21
Retail trade accounted for 60 per cent of the take up of industrial space in 2021, in line with the surging trend to e-commerce in Australia, while industrial vacancy rates dipped from 2.4 per cent to 2 per cent in Brisbane over the year.
Prime net face rents have increased 2.8 per cent over the past 12 months.
But in the race to secure pre-leases prime incentives have increased alongside this. The average incentive at the end of December was 21 per cent, up 220 basis points over the year.
Consequently, net effective rents have actually dropped 0.2 per cent quarter on quarter.
“In line with the elevated speculative supply pipeline in the Brisbane industrial market, many of the significant occupier transactions for the quarter were in pre-lease market,” J-Baleh said.
“The most significant pre-lease deals in the fourth quarter of 2021 include Winning Appliances at 3270 Ipswich Road, Wacol for 45,740sq m, and Bapcor Limited in Berrinba for 45,000sq m.
“It is expected that larger occupiers will continue to look at speculative developments for their future space requirements as tranches of speculative supply continue to be developed.”
J-Baleh said the decreased land availability in Brisbane had led to significant land value appreciation. Small lots in Brisbane were now priced at about $414 per sq metre, an increase of 8.4 per cent year on year while large lots were averaging $302 per sq metre, an increase of 10.6 per cent year on year.
“Land values are expected to continue to rise as land availability becomes scarce in Brisbane. Particularly in precincts where there is not a great amount of future land development available,” she said.
“However, this in turn will result in a lack of pure land transactions as developers will look to hold on to land offerings to capitalise on the future value rather than dispose of them.”
Australia’s industrial vacancy rates are at an all-time low of 1.3 per cent nationally, down from 6.3 per cent two years ago.
Article Source: www.theurbandeveloper.com
Charter Hall Spends $66m on SPC Factory
Busy fund manager Charter Hall has outlaid $66 million for a food processing plant at Shepparton in rural Victoria, adding to its expanding logistics portfolio.
The 126,000sq m facility, two hours north of Melbourne, was sold by fruit and vegetable giant SPC.
The initial yield on the transaction is about 6.1 per cent, setting a fresh benchmark for the local market where prime deals have been rare.
The processing plant is on a largely unused 23.4ha site at Andrew Fairly Avenue, providing Charter Hall with development potential.
It was purchased with a 30-year triple-net lease and will be held in Charter Hall’s $2.5 billion Direct Industrial Fund No.4 (DIF4).
Chris O’Brien, Ben Hegerty and Andrew Bell from CBRE brokered the deal.
Charter Hall direct chief executive Steven Bennett said the acquisition fitted comfortably within DIF4’s strategy of buying quality industrial property near transport infrastructure coupled with strong tenant covenants.
“DIF4 continues to meet investor demand for high-quality exposure to the resilient and growing industrial and logistics property market,” Bennett said.
“[This] acquisition is consistent with the fund’s investment strategy, presenting a rare 30-year triple net lease, introduces a new tenant customer to the fund’s portfolio and enhances DIF4’s exposure to the non-discretionary food industry.”
Charter Hall noted the Shepparton acquisition would extend the fund’s weighted average lease expiry to 11.2 years at 100 per cent occupancy.
The DIF4 property portfolio includes the 21,000sq m Edinburgh Parks Distribution Centre in Adelaide, leased to poultry producer Inghams, and a 31,000sq m facility in south-west Sydney, leased to global logistics group Mainfreight.
In recent months, DIF4 has deployed over $375 million in acquisitions, providing investors access to leading national tenants including Cleanaway, Tesla, Bunnings and the federal government.
Charter Hall head of industrial development Andrew Simons told The Urban Developer the ASX-listed fund manager’s industrial arm was actively focusing on providing “last-mile” solutions in 2022.
“The standout [in 2021] has been the shift in mindset in the urgency of our tenant customers to adopt automation,” Simons said.
“Pre-Covid the general view was that automation was a good thing to acknowledge and possibly pursue.
“Post-Covid the mindset has changed to automation being something to consider as a priority noting the changing world and the benefits of scale, efficiency and flexibility automation can bring to their businesses.”
Simons said the renewed focus would require significant change to permitted land uses, a need to rethink strategies around zoning, permitted uses, hours of operation and concepts such as multi-level, high density warehousing.
“This will become critical to allow our cities to function effectively in the future,” he said.
The group’s managed portfolio of warehouse and logistics assets, worth $3.4 billion, booked a 9.6 per cent lift in values last year.
Charter Hall currently has a $2.3 billion industrial and logistics pipeline with a focus on Sydney and Melbourne.
Article Source: www.theurbandeveloper.com
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