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Stockland will cut its losses and sell a portfolio of near-new industrial warehouses for about 15 per cent less than the price it paid two years ago.
The Sydney-based fund manager and developer is expecting to make about $50 million for the Altona North warehouses, leased to Toll Holdings for a weighted average of 5.5 years.
A $50 million sale price would equate to an approximate 8 per cent yield, based on the portfolio’s annual income of $4.1 million.
Stockland paid $58 million on a low 7 per cent yield for the three high-tech office warehouses in August 2006 in what was considered a landmark sale that “re-rated” Melbourne’s already healthy industrial investment market.
The portfolio was offloaded by Portland House Group, an investment company led by wealthy businessman David Hain.
Two of the buildings are used as distribution centres for Nike and Arnotts, while a third property is for Toll’s IPEC division.
The buildings are part of a nine-warehouse business park built for, and fully leased to Toll businesses.
Stockland says it will recycling capital from the Altona North portfolio into higher growth investments. This includes reinvesting in its existing development pipeline, or even buying new assets.
In August, Stockland announced a 58.9 per cent slide in full-year net profit to $705.2 million for the 2008 financial year. During that period Stockland sold $787 million of commercial property, to achieve a low debt gearing of 28.9 per cent. The company also issued a profit downgrade for its British operations yesterday.
CB Richard Ellis senior director Graham Hemingway is marketing the Altona North portfolio.
The portfolio has been a little earner for Mr Hemingway, having sold the properties from Toll to Portland, then Stockland.
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