Dexus fund divests Melbourne, Brisbane warehouses

Central West (outlined) is trading on a 4.9 per cent yield.

Dexus has shed the value of its Wholesale Australian Property Fund (DWAPF) portfolio some $200 million – about 10 per cent – with the disposal of three major east coast industrial investments.

Two parts of the Laverton North property offer development upside.

In the biggest deal, the group is selling the 12.1 hectare, 56,112 square metre Central West Distribution Centre in Melbourne’s Laverton North, for $92 million – the December, 2023, value.

The deal is a boon – it paid $49m in 2014.

The results also reflects a low 4.9pc yield.

The Port Melbourne property (outlined) is selling for 11 per cent over valuation.

A KordaMentha fund backed by PGIM is the buyer.

Below market rent, development upside

The Lorimer Street asset is trading on a 5.2 per cent yield.

At 13-19 William Angliss Drive, with two warehouses leased to Visy Glass Logistics and another to Concept Logistics, Central West’s ($4.54m) annual return is, according to the selling agents, about 27pc below market.

The weighted average lease expiry by income is about 5.5 years.

The asset also offers significant immediate development upside via two tracts either side of crossovers facing Dohertys Road – one spanning 1.6ha.

Just prior to COVID, the manager said, Central West was appraised at $57.5m.

Premium Port Melbourne return

Meanwhile, Dexus has sold a 3.34ha Port Melbourne warehouse for $61m, an 11pc premium to the ($55m) December, 2023, valuation but less based on the ($58m) September, 2023, appraisal.

At 704-744 (commonly known as 730) Lorimer St, the distribution centre with 25,404 sqm anchored to Sensory Lab returns net rent of $3.2m – again considered below market, according to the agents – meaning the deal demonstrates a 5.2pc yield (story continues below).

The Brisbane asset was valued in December at $51 million.

The WALE is short – 1.9 years.

With 75 pc of Melbourne’s population a 45 minute drive away, it holds development upside as a more significant last mile logistics asset after that.

With Port Melbourne the city’s priciest industrial precinct and vacancy low – replacement product could be multi-level.

Dexus, via an AMP Capital fund, paid Centennial $36.2m in 2015.

The buyer is a private investor.

Brisbane sale

The final property Dexus announced in March it would sell – 121 Evans Rd, Salisbury, in Brisbane’s south, is speculated to be collecting over $53m.

With 29,396 square metres in four buildings leased to five tenants, Bluescope Steel amongst them, its WALE by income is about 3.5 years.

Salisbury is about 12 kilometres from the CBD.

The three DWAPF properties were marketed by Cushman & Wakefield’s Tony Iuliano, Chris Jones and Adrian Rowse with JLL’s Ben Hegerty, Joel Scully and Jack Kelliher.

The fund, which recently finalised a $65m debt facility with ANZ, retains 24 properties worth a total c$1.95 billion.

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Marc Pallisco

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