Lendlease buys industrial portfolio at 4pc yield

The Altona property abuts APPF’s 21-27 Marshall Court.

Lendlease today confirmed its Australian Prime Property Fund purchased three fully leased industrial investments for a total of $161 million.

The deal, mooted last month, reflects a four per cent net passing yield.

APPF’s new Altona North property (pictured) neighbours the fund’s 121-139 Dohertys Road.

The trust now holds 39 assets.

Two of its new properties – in Melbourne’s Altona and Altona North – abut APPF holdings, enabling long-term development upside.

Elsewhere in the Victorian capital, in April, the fund banked $136.5m selling Caroline Springs shopping centre, CS Square, to Colin DeLutis’ DeGroup.

Not long after, APPF paid Swiss Re $203m for a CBD office neighbouring one it owns – creating a 5146 square metre amalgamation.

Last month, Lendlease sold the National Pension Service of Korea an unbuilt Docklands commercial building for $1.2 billion – the year’s highest priced office deal.

MILP portfolio

The three new Lendlease investments were offered by Mirvac on behalf of the Mirvac Industrial Logistics Portfolio, a vehicle held with Morgan Stanley Real Estate Investing.

When the properties hit the market in May, the guide was c$150m.

The priciest asset, 26-38 Harcourt Road, Altona, leased to DHL as a distribution centre, spreads 6.4 hectares.

In nearby Altona North, a 5.55ha warehouse, 47 Westgate Drive, is occupied by Brand Collective (story continues below).

The third property, 1 Johnson Road, Campbelltown, marks the trust’s first foray into south west Sydney.

On 3.28ha, this asset is rented to ZircoData for 5.9 more years.

Lendlease focuses on industrial

“This is a high-quality portfolio of modern, well leased assets in tightly held precincts set to continue to benefit from strong demand tailwinds,” Lendlease managing director, Funds Management, Scott Mosely said of the deal.

“With two of the assets adjoining the fund’s existing holdings, this strategic acquisition provides multiple opportunities to unlock synergies and add further value for our investors,” he added.

“The industrial sector continues to benefit from global thematics including e-commerce, on-shore manufacturing and a desire to be positioned close to the end-consumer,” according to the executive.

“This has driven demand for strategically located assets, with Campbelltown and Altona being prime examples of tightly held precincts that will continue to benefit from transport connectivity and continued investment in infrastructure”.

In May, Lendlease, also for APPF, paid $130.1m – reflecting a 3.62pc yield – for an Eastern Creek distribution centre leased to Best & Less.

CBRE’s Rory Hilton and Chris O’Brien with JLL’s Tony Iuliano and Andrew Rowse marketed the MILP portfolio.

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Marc Pallisco

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