Ascot Capital is paying $18.8 million for a prominent north Adelaide factory recently rezoned for medium density residential.
The vendor, a Value Partners Asia Pacific Fund also reported as Prosperity Assets, paid $11.5m for the St Clair property in September, 2018.
It later applied to planning minister Stephan Knoll, via Charles Sturt Council, for a development plan amendment.
The site, occupied by Trident Plastics since c1977, was classified urban employment, which prevented residential redevelopment.
Now it can make way for about 95 townhouses or 50 apartments.
The land is surrounded by new housing estates and St Clair Recreation Centre which recently underwent a $26m redevelopment.
Days numbered for area’s last factory
The 589-599 Torrens Road property is the area’s only factory.
The occupier has seven years left on a lease (story continues below).
On 2.97 hectares the asset contains a 15,500 sqm warehouse.
Based on the return, Ascot is picking it up at a 5.64 per cent passing yield.
“The sale price reflects a significant premium to the book value of the property, which is an excellent outcome for investors in the fund,” Rachel Tong, managing director and head of Real Estate Private Equity, with Value Partners Group Limited, said.
“While we are exiting this asset, the fund continues to look for yield accreditive opportunities in Adelaide and elsewhere in Australia given demand from our investors for quality assets in a stable market,” the executive added.
The manager also holds logistics centres, offices and student accommodation.
St Clair is 10km from the city.