Hines enters Australian industrial sector with $211.5m portfolio

The South Granville asset is leased to BlueScope Steel.

Hines has entered the Australian industrial sector snaring four east coast investments, some with development upside, from fund manager Pipeclay Lawson.

The properties – three in Sydney’s west with the other in Brisbane’s Trade Coast precinct – are setting the US based private group back $211.5 million reflecting a c3.4 per cent net passing yield.

Part of the Chullora property can accommodate another c8400 square metres of product.

They will be held by the 11 month old Hines Asia Property Partners, a diversified, open-ended fund with a c$540m backing by Cadillac Fairview, the Ontario Teachers’ Pension Plan’s real estate purchasing arm.

Pipeclay Lawson was represented by JLL’s Roger Miller, Tony Iuliano and Gary Hyland.

CG Property’s Michael Callow co-marketed the Queensland asset.

The disposals come eight months since we reported the same vendor sold Centennial Industrial & Logistics two Brisbane warehouses – 141A Boundary Road, Oxley (for $15.425m) and 87 Bancroft Rd, Pinkenba ($10.42m).

Elsewhere in Australia, in Melbourne, Hines has earmarked offices at 600 Collins Street, in the CBD, and Collingwood, and acquired sites for Build to Rent investments in Brunswick and North Melbourne.

Hines’ maiden Australian industrial investment

Containing 58,350 square metres of improvements, returning overall annual rent of c$7.18m, Hines’ latest industrial portfolio includes in Sydney:

  • 128-138 Russell St, Emu Plains (pictured, top) – a 4.9 hectare parcel with 19,171 sqm of improvements, leased to BlueScope Steel. Part of this property could contain additional product;
  • 68 Anzac St, Chullora. Spreading a 3.57ha site, part of which can accommodate another 8400 sqm of warehousing, it includes two improvements, initially offered, last October with short term leases to Australia Post and Norcal (which paid annual rent of $2.17m) but leased mid-campaign to Lawrence Dry Cleaners and Uniwell, and
  • 13 Ferndell St, South Granville. On 2.7ha, this asset is also leased to BlueScope Steel.

In Brisbane’s Pinkenba, Hines is purchasing 55 Brownlee St; on 1.06ha, occupied by L3 Harris Technologies, it earns net annual rent of $825,617.

HAPP holds five more logistics investments, in China, Japan, Singapore and South Korea. Combined with the Australian properties, these contain 290,000 sqm of lettable area (story continues below).

The modern Pinkenba warehouse returns annual net rent of $825,617.

Room to grow

The Pipeclay Lawson portfolio’s Weighted Average Lease Expiry is four years.

When further developed, the assets have the potential to generate an additional c$2.6m in yearly income.

“These four assets provide us with immediate scale and a solid foundation on which to grow our industrial and logistics platform in Australia,” Alysia Reilly, Hines head of industrial and logistics, Australia, said.

“Our acquisition strategy is location driven so the fact that this portfolio was heavily weighted to Sydney was a key driver,” she added.

“We are actively targeting locations that fit Hines’ last-mile/urban logistics criteria and assets that we can transition into next-generation urban infill distribution centres over time,” according to the executive.

HAPP senior managing director and fund manager, Simon Shenn, said the group will seek further logistics assets in the region.

“The logistics market is experiencing robust growth globally and Hines is bringing high quality product that caters to the future requirements of the sector and improves today’s logistics operator’s experiences,” he added.

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Marc Pallisco

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