Fund manager takes hit on Adelaide distribution centre
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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