Fund manager takes hit on Adelaide distribution centre

Straits Real Estate bought neighbouring Docklands properties in 2022.
The Sydney office (outlined), held since 2017, holds significant development upside.

Straits Real Estate has accepted an 18 per cent discount to the December, 2023, book value, for an inner-city distribution centre acquired when it consolidated with Commercial & General between 2018-2022.

Leased to Visy, the 5.03 hectare property, 34 Share Street, Kilkenny (Google Street View image, top), fetched $52.7m.

Four months ago, it was appraised at $64.3m.

Settlement is scheduled by the end of the year.

New chapter for historic property

SRE paid $11.6m ex-GST for the Kilkenny site in October, 2018; it previously accommodated steel office furniture maker Brownbuilt in brick and tin buildings, some developed 120 years ago as part of local businessman’s John Shearer’s farming machinery manufacturing business.

A 37,809 sqm glass bottle distribution centre was subsequently purpose-built for Visy – opening four years ago (story continues below).

The vendor said the sale is in line with a strategy to redeploy capital from low yielding investments into potentially higher return investments; it holds office, retail and industrial real estate.

The disposal comes two years since the fund manager and investor outlaid $150m for neighbouring offices and a car park with development upside in Melbourne’s Docklands.

The group also backs ARA Capital which has since 2017 held the former Telstra Plaza, a 28 level office in Sydney’s Pitt St, on land with the potential to accommodate something significantly taller.

Kilkenny is six kilometres north west of the CBD.

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Marc Pallisco

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