Sydney-based property investment and asset management company, PropertyLink, has bought warehousing facilities at Melbourne Market for A$77.4 million (€53.82 million; $71.89 million) from developer Hansen Yunken. The deal reflected an initial yield of 9.6 percent.
The wholesale fruit, vegetable and flower market, which is relocating from Footscray to Epping, will add to the investment assets of the Propertylink Australian Industrial Partnership (PAIP), the company’s industrial property vehicle launched in March with capital from US investment bank Goldman Sachs and UK property company Grosvenor.
Under the deal, Propertylink will acquire five warehouses, expected to be delivered in the second quarter of 2015. The warehouses, spread over 818,000 square feet, currently have 41 tenants, with leases ranging between five to ten years.
The decision to invest in the Melbourne Markets development was led by a “strong sense of tenant retention and laden desire to be in and around the markets,” Stephen Day, Propertylink’s managing director told PERE. “We have a clear line of sight to sufficient demand that will be a 100 percent leased on completion,” he said.
In addition, the company also announced its acquisition of an industrial property at Minto in south west Sydney. The 253,406 square foot property at 50 Airds Road has been purchased for A$21.6 million.
Following the two transactions, PAIP now owns more A$360 million in assets across Australia.
On the Minto acquisition, Peter McDonald, head of property at Propertylink said: “We have specifically targeted Sydney’s south west as recent and planned infrastructure projects will have a significant impact on the rental and capital growth in the area.”
PAIP has been actively adding to its diversified industrial portfolio, with a strategy to “take advantage of the mispricing of the shorter lease traditional industrial assets and multi-let estate, and blending them with better quality core assets in good locations,” said Day.
The company is also reviewing over $100 million worth of new assets in the metro areas of Sydney, Melbourne and Brisbane.
There have also been speculations that Propertylink is eyeing a portfolio being sold by Australian property investment management firm Valad, reportedly worth $145 million. While Day agreed that it is among the assets he would look at, he refused to divulge any details.