Irongate invests $156m in Perth, Melbourne

Irongate with Frasers Property Australia recently acquired Yarraville’s ex-Bradmill factory with plans for a housing estate.

Irongate (IAP) is paying $26 million for a business park in Perth’s Bibra Lake.

The deal for 16 Aspiration Court with Desmar Holdings reflects a 5.8 per cent yield.

Built in 2016, the asset includes eight warehouses comprising a total of 16,861 square metres – all of which is let; the Weighted Average Lease Expiry is 3.5 years.

There are also 296 car parks.

Bibra Lake is about 16 kilometres south of the city, near Fremantly Port, Kewdale Freight Terminal and Perth Airport.

“We have been able to secure the property off-market at an acquisition yield of 5.8pc, which provides an attractive spread to the eastern seaboard states, where industrial assets are currently commanding yields of 4-4.75pc,” IAP chief executive officer, Graeme Katz, said.

“Recent transactions indicate that this will compress as investors shift their focus to the higher yields on offer in the Western Australian industrial market,” he added.

“Vacancy in Perth’s southern industrial precincts continued to fall in H1 2021, sitting at 5.4pc, largely because of tenants seeking quality accommodation in good locations” according to the executive

“With land supply in Perth’s key industrial precincts heavily constrained and the supply pipeline at all time lows, we believe the Perth industrial market is set for continued vacancy compression and rental growth”.

IAP buys into Cremorne

Meanwhile in Melbourne’s inner east Cremorne, IAP has outlaid $130m for a half stake in 510 Church Street (artist’s impression, top), which is under construction.

That seller was Alfasi Group which will retain the balance.

The 10 level office will contain 19,798 sqm of lettable area including ground floor retail.

It is also designed with a rooftop terrace bar and 145 car parks (story continues below).

About 76pc has been leased – including to Tokyo listed marketing agency Dentsu, Monash IVF and the federal government’s National Disability Insurance Scheme; the WALE is 7.5 years.

Alfasi offered it for sale in September with a 12 month rental guarantee over the vacant component.

Cushman & Wakefield’s Leigh Melbourne, Nick Rathgeber, Josh Cullen and Mark Hanson were the agents.

“The Cremorne property provides us with an opportunity to improve the overall qualuty of the portfolio in a market we are familiar with,” Mr Katz said.

An institutional placement to raise $50m for the the acquisitions will now be launched in the form of 32,258,065 shares at $1.55 per unit (a 6.3pc discount to the ASX closing price on December 8).

Post settlement and the placement, IAP’s pro forma gearing will sit at 34.3pc – below its midpoint target.

IAP reweights

The acquisitions come three months since IAP partnered with Frasers Property Australia to buy the 24.3ha ex-Bradmill factory, in Melbourne’s west Yarraville, with plans for a major residential project.

In August, the manager outlaid $36m on a funds through basis for a suburban Brisbane office set to be Michael Hill’s headquarters.

Four months earlier, IAP snapped up two warehouses, again in the Queensland capital and on a funds through basis, for a total of $20.25m.

In March, the group spent $24.75m for a distribution centre near Brisbane Airport leased to ecommerce giant Grays.

Also earlier this year, IAP picked up an office in Canberra’s Forrest from Blackstone for $73.75m.

Last month the manager sold an ACT commercial building at Symonston, leased to the Attorney General office, for $36m to Charter Hall.

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Marc Pallisco

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