EG doubles down in Blackburn
Forza Capital has sold two east Melbourne industrial investments to EG Funds Management.
In the biggest deal, a multi-tenanted 21,903 square metre property on 4.14 hectares at 15-33 Alfred Street, Blackburn (pictured, top), is trading for $59.43 million.
The result is a major windfall for the vendor which paid GM Funds Management $31.5m in 2017 on behalf of a syndicate of high net worth individuals.
A 2400 sqm improvement, purpose built as a rock climbing centre for Urban Climb which signed a 10 year pre-commitment, was recently added.
During its ownership, Forza also renewed existing leases while vacant spaces were re-let after a refurbishment.
Allegion and CoolDrive are amongst the asset’s logistics operators.
The property’s blended Weighted Average Lease Expiry is 5.5 years.
Its sale delivers syndicate members an Internal Rate of Return of 14 per cent, per annum, net of fees.
Blackburn North
In a smaller deal, Forza is banking $19.57m for a 6099 sqm asset on 1.08ha at 6-16 Joseph St, Blackburn North.
The manager paid just $11m two years ago; at the time the WALE was less than 12 months.
It was held in equal part by the group and a high net worth family.
“Through active management we increased the net income by over 60pc, improved the quality of the tenant profile and achieved a five year WALE,” Forza director Adam Murchie said (story continues below).
Myrio Therapeutics, formerly Affinity BIO, is one of the occupiers – as is the Melbourne Badminton Centre.
The sale, negotiated by CBRE, delivers the vendor a net 18.2pc pa IRR.
Properties earmarked for ACE
EG will slot the properties in its Australian Core Enhanced Fund (ACE) – which now holds 12 assets.
“Urban industrial assets such as these offer good access to high density catchments and large populations and are playing an increasingly important part in the supply chain for businesses seeking fast access to their customers,” EG head of Capital Transactions, Sean Fleming, said.
“They just aren’t making any more urban industrial land,” he added.
EG is deploying capital into ACE following an equity commitment earlier this year by Dutch pension giant PGGM that gives the fund the ability to invest over $1.25 billion.
In August, we reported the manager outlaid $33m for an industrial investment at Sydney’s Matraville.
Not long earlier the group spent $21.5m on a warehouse in Brisbane’s Richlands.
The portfolio value substantially rose in June, following a $450m deal to buy a half-stake in two Sydney CBD offices (50 and 60 Carrington St), and a full share of 32 Walker St, North Sydney.
Last year, for ACE, the manager purchased a Bunnings outlet with significant industrial development upside at Rockdale, about four kilometres from Sydney’s Kingsford Smith Airport.
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