A joint venture between New South Wales’ Treasury Corporation (TCorp) and LOGOS – which is majority controlled by Singapore’s ARA Asset Management – is paying $172 million for two distribution centres offered by pharmaceutical giant Sigma with a leaseback.
The facilities, in Sydney’s Kemps Creek (pictured, top) and Brisbane’s Berrinba (right), were purpose built by the vendor between 2016 and 2019.
Factoring in the c$60m spent on initiatives including automation, the sale price is “well above the original investment cost”.
Upon announcing the deals yesterday, Sigma added that two more distribution centres also listed with a leaseback – in Perth’s Canning Vale and Truganina, in Melbourne – will be retained.
PwC Real Estate Advisory’s Garrick Pepper and Damian Horton represented the seller.
LOGOS, TCorp and Sigma seal deal at 4.65pc yield
A 15-year lease to Sigma will kick in when the two properties settle later this month.
In 2035, the occupier will be presented with the first of its two five-year renewal options.
LOGOS and TCorp will collect combined starting annual rent of $8m.
On that basis, its transaction is being sealed at a 4.65 per cent passing yield.
About 10pc of the government agency’s $103b of assets under management is allocated to property and infrastructure.
In March, it appointed Lendlease to manage a $1.6b fund, the Australia Mandate.
For LOGOS, the acquisition is consistent with recent comments that it is keen to invest in real estate backed by pharmaceutical occupiers (story continues below).
The Sigma properties
The Kemps Creek warehouse is the biggest – measuring 41,325 square metres and costing Sigma $38.2m.
Completed by Qanstruct last year, this facility contains a 1700 sqm glass-fronted A-grade office and large staff car park.
The suburb is about 39 kilometres west of Sydney.
The Berrinba complex in Wayne Gross Drive spreads 16,000 sqm – about five per cent of which is designed with offices. FKG Group completed this $21m facility, 24km south of Brisbane, in 2017.
Mr Garrick said the sale process received “significant interest” from local and offshore institutional investors “which is consistent with other recent transactions within the industrial sector, and indicative of the resilience of both the capital markets and long-term growth associated with this asset class”.
Sigma to pay down debt with proceeds
Sigma chief executive officer and managing director Mark Hooper said the disposal of the Kemps Creek and Berrinba facility “is a great outcome for…shareholders”.
“Owning and managing the construction phase gave us control over the build and created value for shareholders,” the businessman added.
“By completing this transaction, we benefit from LOGOS as the owner and manager of our tenancies…while capturing the latent value that was not previously recognised on Sigma’s balance sheet.
Proceeds from the sale will reduce net debt to below $100m, Mr Hopper said.