Charter Hall flips under-utilised industrial site
Charter Hall has sold a 4.84 hectare industrial investment with the potential to be replaced wih a residential based project, in Brisbane’s north Brendale.
The fund manager is turning a profit on the $23.8 million deal for 23-25 South Pine Road.
It paid a Melbourne syndicate $19.7m in October, 2021.
Another Melbourne based group has bought it back: Partners Private in collaboration with KordaMentha Property Funds.
It is the second pairing for PP and KM Property Funds which last August spent $16m on a Dandenong South, Melbourne, warehouse leased to Quest Carpets.
Coincidentally Charter Hall is this month selling another investment in the Brendale street – #45-53 South Pine Rd, spreading 2.69ha – to Trilogy Funds Management for $29m, a drop on the $32.25m it paid, again in 2021.
Low site coverage
Covering two sites, with 4097 square metres of improvements, 23-25 South Pine Rd carries a 4.2 year weighted average lease expiry; the major tenant is ASX-listed Eagers subsidiary Austral Pty Ltd, for motor trading.
Buildings cover a low portion of the block – giving the property development upside.
The suburb is experiencing its lowest industrial vacancy rate on record, the buyers added, catering for the demand side.
Zoned Central, opposite Strathpine station and with housing estates abutting it to two sides, the holding it is longer term expected to make way for residential with some shops, offices and/or essential services amenity.
“We were attracted to this property because it is…zoned for higher and better use in an emerging Brisbane suburb and economy,” KM Property Funds Acquisitions director, Tom Korda, said.
“What makes it even more attractive is the potential to grow the yield and investment value through rent reversion and active asset management,” he added (story continues below).
“This all combined provided an attractive risk adjusted value-add forecast return for investors,” according to the executive.
KM Property Funds is part of KordaMentha’s Real Estate group.
Fund subscribed before close date: manager
The 23-25 South Pine Rd asset will be held in the KordaMentha Industrial 02 trust – which was subscribed ahead of its offer close date, the buyer said.
“The opportunity to participate in the fund was highly sought after by Partners Private’s clients seeking value-add style returns through the acquisition of mid-market, high growth, industrial real estate,” they added.
“The investment presents a unique opportunity to own a land rich industrial property with low site coverage, yield upside and flexible zoning for future development”.
Partners Private chief executive officer, Tom Davis, said the latest fund received support from some investors in the KordaMentha Industrial Trust 01, which holds the Dandenong South asset.
Backers in another managed entity, the Epping Healthcare Fund, also participated, he added.
“We will continue to target mid-market, high-growth industrial assets using local capital as that is what investors are seeking,” according to the executive.
Knight Frank’s Elliot Ryan represented Charter Hall off-market.
“Brisbane is expected to continue to grow, particularly in the northern corridor, given the strong levels of investment into infrastructure within the area as a result of major projects including the 2032 Olympic Games,” he said.
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