APN Industria REIT is paying $18.34 million for a frozen food factory in Brisbane’s western corridor.
The Wacol site at 60 Grindle Road is leased to Vesco Foods for nine more years.
Established 45 years ago, Vesco Foods manufactures ready-made meals and owns or licenses brands including Lean Cuisine, On the Menu, Super Natural and Annabel Karmel – which are all sold in the major supermarkets.
The business pays $1.48 million a year to rent 60 Grindle Road.
On that basis, the investment is selling on an 8 per cent passing yield.
The property contains 8791 square metres of lettable area and sits on a 4.52 hectare block close to Centenary Highway, Ipswich Motorway and Logan Motorway.
Sixteen other food makers are based in the suburb – as is Volvo, Bridgestone, Penske and Komatsu.
Wacol is about 23 radial kilometres south east of Brisbane and 18 kilometres east of Ipswich.
“We’re excited to secure another opportunity to deploy capital at a strong and growing initial yield of 8 per cent, underpinned by a tenant that’s a category leader in frozen ready-made meals in the supermarket aisles and which has been in operation for over 40 years,” APN Industria REIT fund manager, Alex Abell, said.
“As a result of the capital deployment, FYI20 FFO guidance has been upgraded to 3.5 per cent as we continue to build on our track record of outperforming our initial guidance throughout the year.
“Post settlement, anticipated for late September, 2019, gearing will remain low at approximately 32 per cent – the lower end of the target 30-40 per cent band”.
In May, we reported that APN Industria REIT paid $9.5 million for a 2.3 hectare industrial investment at 147-153 Canterbury Road, Kilsyth, and about $28.75 million for a portfolio of three assets in Knoxfield, also in Melbourne’s east.
Last September we reported it paid $10.6 million for an industrial property in Melbourne’s Derrimut leased to Downer Utilities Australia (pictured, above).