Dexus spends $173.5m on two premium east coast industrial investments

Dexus is spending $100 million on 37-39 Wentworth Street, Greenacre, in Sydney’s south west, for one of its unlisted funds.

Dexus Australian Logistics Trust – in which Dexus holds a 51 per cent stake and GIC the balance – has spent $173.5 million on two premium industrial investments.

In the pricier deal, the fund is paying $100m for a four hectare facility at 37-39 Wentworth Street, Greenacre, about 13 kilometres south west of Sydney.

The property includes a modern, 19,246 square metre cold store and ambient complex leased to two occupiers, Real Dairy and Tomkin.

Dexus is paying $73.5 million on a funds-through basis for Ford’s proposed parts distribution centre in Mickleham.

It also contains a 5950 sqm tract which is being developed with expansion space for the former.

Close to Centenary Drive, the M4, and Enfield Intermodal Logistics Centre, Dexus is expecting to settle on this asset this month.

Factoring in the new building (due for completion in February) this investment will have a weighted average lease expiry of 13.5 years.

The rent agreement is structured with fixed three per cent rises.

Dexus is buying 37-39 Wentworth Rd on a five per cent passing yield.

Dexus snaps up Ford’s warehouse for $73.5m on a funds-through

In Melbourne meanwhile, Dexus is paying MAB Corporation and Gibson Property Corporation $73.5m for an 8.8ha distribution centre under construction for Ford Australia in Mickleham.

The 51,595 sqm complex, reported about yesterday, forms part of Merrifield Business Park, which at 415ha, will be Victoria’s biggest industrial estate (story continues below).

Last March, Kaufland acquired a 28ha site there for a logistics complex which it is now trying to sell, after recently deciding not to open in Australia.

D’orsogna, Dulux and Steritech are the other occupiers to date.

Mickleham is about 29kms from town and half that distance to Melbourne Airport.

“The site is located in an emerging industrial market, strategically located for metropolitan and interstate goods distribution, providing direct access to the Hume Highway, easy connections to the Western Ring Road and Melbourne Airport,” a Dexus statement said.

“The acquisition is structured as a fund-through development with a coupon on contributed capital of 6.5pc up to practical completion in August 2021.

“On completion the asset will have a weighted average lease expiry by income of 10 years and will generate a passing yield of 5.25pc with fixed annual increase of 3.25pc over the initial lease term”.

Settlement of the land component is expected this month, too.

Dexus chief executive officer Darren Steinberg added the Greenacre and Mickleham purchases “build on the Dexus Australian Logistics Trust’s mandate to acquire quality, well leased assets that deliver favourable total returns and increase the total group industrial exposure to over $5 billion”.

Each investor in the unlisted open-ended fund will finance their respective share of acquisition costs with Dexus’ interest to be funded from existing debt facilities, the executive said.

Sovereign wealth fund GIC was formerly known as Government of Singapore Investment Corporation.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco