‘Buy wholesale, sell retail’ strategy delivers another windfall for Terraplex
Unitholders in a syndicate managed by Anthony Wilson’s Terraplex have reaped a windfall of 23 per cent – just over $10 million – from an industrial sell-down adopting a ‘buy wholesale, sell retail’ strategy.
The property at 450-466 Princes Highway, Noble Park, cost a single asset trust syndicated to the investors $44.6 million in a deal settling last October.
After a rebrand – to Noble Park Industrial Estate – and a 10-lot subdivision and sell-down, it collected c$54.9m.
Three units sold by November – the group estimating for a 44pc profit.
With 22,084 square metres, the buyers were a mix of investors and owner-occupiers.
IRR twice what was anticipated
The 4.04 hectare Commercial 2 zoned property also contains 386 at grade car parks.
Lendlease offered it strata-titled, rented 20pc below the market rate.
It also accepted a 20pc discount to replacement cost.
The fund Terraplex earmarked it for closed oversubscribed within a month of the property settling.
Director Rob Wallace said the internal rate of return is just over 30 per cent – more than twice what it told unitholders it was aiming for.
“This investment showcases our ability to identify opportunities to execute a clear strategy – buying wholesale, selling retail, and achieving a 23pc premium on the…purchase price,” he added
“From the outset, the strategy focued on a quick turnaround, returning both initial capital and profits,” according to the executive.
“While the industrial property market had stabilised after a period of rapid growth, Terraplex reports continued buyer demand for units in the 1000-3000 sqm range from both investors and owner-occupiers”.
The deal comes two years since Terraplex sold down the last shops in Emerald Hill Terrace – a row along Clarendon St, South Melbourne years ago owned by the state government – also for a profit on the outlay.
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