Ascendas pays Goodman $70.3m for Crestmead logistics investment

Goodman is set to complete construction of 500 Green Road by the end of next year.

Ascendas Real Estate Investment Trust (Ascendas Reit) is paying Goodman $70.3 million for an unbuilt industrial investment in Crestmead, a major distribution centre hub 32 kilometres south of Brisbane.

The deal is being struck on a 5.4 per cent market yield – or 5.6pc for the purchaser after costs.

Covering 6.25 hectares, 500 Greeen Road will contain a 38,650 square metre warehouse with the potential to be configured as four tenancies.

Goodman Group offered a 2.5 year rental guarantee.

Its subsidiary, Goodman Property Services, is set to construct it by the end of next year.

Singapore listed Ascendas Reit, managed by Ascendas Fund Management, will use resources and available debt facilities to settle the purchase.

Following the Crestmead acquisition, the trust holds 10 Brisbane logistics assets.

The Green Rd asset ups the net lettable area it can offer in the Queensland capital by 21pc to 220,532 sqm.

In the immediate vicinity, Mapletree Logistics Trust last November spent $95m on a 36ha industrial development site.

Mid last year Charter Hall paid Metcash $183.6m on a leaseback for a distribution centre in the pocket, near the Logan, Gateway and Pacific motorways (story continues below).

Ascendas Reit’s Crestmead asset

Five hundred Green Rd will have a 12.2 metre ceiling height, LED lighting and rooftop solar panels.

Goodman is aiming for a 5-star Green Star Design & As Built rating.

“Crestmead is an established hub for interstate, intrastate and metropolitan distribution given its close proximity to key motorways…that provide connections to… the eastern seaboard,” an Ascendas Reit statement said.

“This acquisition extends our logistics footprint in key distribution markets that will benefit from the robust domestic consumption and e-commerce demand in Australia,” executive director and chief executive officer, William Tay, added.

There has been a lack of high quality new stock, pointing to a south corridor industrial vacancy rate of 2.4pc, according to the landlord.

“In the 12 months to September, 2020, around 12pc of Australia’s total retail trade estimate was spent on online retail, which is about 38.7pc higher than [the corresponding 2019 period],” it said.

Transaction costs for 500 Green Rd, covering stamp duty and acquisition fees amongst other expenses, will total $1.4m.

An indirect wholly owned Australian fund, Ascendas Longbeach Trust No 12, has been established for the proposed acquisition, the manager added.

The Crestmead warehouse will cover a 6.2 hectare site.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco