Charter Hall, PGGM secure inner Brisbane industrial investment with upside
Charter Hall and Dutch pension fund PGGM have outlaid $60 million for a fully leased Bowen Hills industrial investment with residential development upside.
The 1.56 hectare property, 66-98 Montpelier Road, was offloaded by Office Park Developers, which paid Metro Property Group $25m in 2016.
Both sellers sought to replace the site – Metro with c509 dwellings in five eight storey towers while OPD proposed an office and retail project with four buildings, also of that height.
The new owners have flagged a medium term-redevelopment.
The asset will be held in the Charter Hall managed PGGM Industrial Partnership (CHPIP) which was established in 2019 and now holds a portfolio worth $560m of land rich properties with building upside.
The fund is in due diligence to acquire another $1.6 billion of investments.
66-98 Montpelier Road
With 9534 square metres across four buildings, 66-98 Montpelier Rd is leased to several tenants including Corporate House Services, Mine Site Technologies, Sime Darby and Tradelink.
The Weighted Average Lease Expiry is 4.4 years with minimum annual rent reviews of three per cent (story continues below).
Charter Hall is paying a price reflecting a 4.4pc net passing yield.
“The Bowen Hills property is a strategic inner brownfield asset surrounded by high quality residential and commercial uses and has potential to be developed into higher and better uses in the medium term,” Charter Hall chief investment officer, Sean McMahon, said.
“This site is also well positioned for last mile or multi-level strategies in the future, providing multiple redevelopment scenarios,’ he added.
“Montpelier Rd’s tenancy and strategic use is in line with CHPIP’s ‘create core’ investment thesis, offering potential for significant capital benefits based on location, prominence, flexible zoning and attractive mixed-use opportunities,” according to the executive.
Blue Commercial brokered the off-market sale.
Bowen Hills is about 2.5 kilometres north east of Brisbane.
It is about twice that distance west of Northshore Hamilton, which will be the 2032 Olympic Games Village.
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