Dexus divests neighbouring Melbourne warehouses

The Knoxfield properties (outlined) opposite Gilbert Park.
The Forbes Close assets return annual rent of $1.106 million.

Dexus has sold two more properties picked up as part of its APN takeover in 2021.

In Knoxfield, east of Melbourne, the neighbouring warehouses, 3 & 4 Forbes Close, were picked up by Arrow Capital Partners for $22.95 million, reflecting a 4.8 per cent net passing yield.

While the result was a $2.1m discount to the December, 2022, book values – it was a premium on the ($19.3m) price APN paid in May, 2019, for the trust now known as the Dexus Industria REIT (DXI).

The divestments come nearly a fortnight since Dexus banked $66.9m for neighbouring warehouses in Stapylton, north of Surfers Paradise.

Last November meanwhile, the manager sold a pair of offices in Sydney’s Rhodes – 1A and 1C Homebush Drive – to Frasers Property Australia for $160.5m.

“This [Knoxfield] divestment brings total sales throughout FY23 to approximately $250m as we continue to actively position DXI to take advantage of future investment opportunities,” DXI fund manager, Alex Abell, said.

“The proceeds from these sales will initially be utilised to repay debt, reducing look-through gearing by approximately one percentage point,” he added.

Settlement is scheduled in August.

Under-rented: agents

Developed in 1986, the Knoxfield warehouses contain 12,674 square metres, leased for over 10 years to SJ Display Group.

The agents said the rent – $87 per sqm, per annum – is well below the market rate and can be increased upon lease expiry in just under three years.

Alternatively – with improvements covering just 53pc of the 2.4 hectare block – buildings may be extended (story continues below).

The assets could also be sold down separately.

Being in a market with low supply – industrial vacancy is less than a per cent – the property could be considered for multi-level warehouses too.

The address is near Ferntree Gully Rd, which links to Eastlink, three kilometres away, and the Monash motorways, Stud Rd and the Burwood Highway.

It is also two kilometres from Westfield Knox City.

Cushman & Wakefield’s Adrian Rowse and Chris Jones with JLL’s Ben Hegerty and Jack Kelliher were the agents.

The assets were part of a portfolio offered earlier this year; the other is also in Melbourne, at 57-67 Mark Anthony Drive, Dandenong South.

Following the three disposals, DXI still holds about 90 assets, worth about $1.3 billion.

The bulk of the portfolio – over 85pc – is industrial product.

The Weighted Average Lease Expiry is about six years.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of