Pelligra Group has spent about $70 million on two regional distribution centres.
The most valuable facility, in Goulburn, New South Wales (pictured, right), is leased to Coles until 2022.
At 134 Lillkar Road, the 16.25 hectare site includes a modern complex with a 42,500 square metre warehouse with 60 access points and 3400 sqm office.
The vendor, Anrose Nominees, paid $72.25m, in 2012.
Pelligra also picked up a 23.25ha property in Queensland’s Warwick, 130 kilometres south west of Brisbane (pictured, right).
At 476 East St it was built for Woolworths’ Big W; it last sold in 1996 for $25m with a leaseback.
The current rental agreement expires in 2023.
Big W said it intends to vacate the facility: a 65,300 sqm warehouse accessed via 103 roller shutter doors, attached to a 430 sqm office.
Imminent vacancy + subsequent risk = high yield
Gill Property directors Graham Hemingway and Stephen Bolton sold both industrial investments.
Genox, the Warwick property owner, and Anrose Nominees, are jointly directed by Melbourne based Andrew White and Roseanne Amarant, the daughter of late property developer Ezriel Rabinowicz (Rabinov).
The agents said the off-market expressions of interest campaign generated eight offers from a mix of local and offshore institutions.
Based on the total annual rental return ($16.05m), and assumed sale price ($70m), the blended yield is at least 23 per cent, which is very high.
The return factors in the risk the landlord may face replacing the large, facilities – and likelihood of it pulling in rents like Coles and Big W presently pay.
Pelligra and re-positioning
East Keilor based Pelligra has a track record of re-positioning sites.
Last May it snapped up from Ford Australia vacant factories in Campbellfield and Geelong, to retrofit as business parks which can be rented to multiple users.
In 2017 the investor bought General Motors Holden’s Elizabeth plant also for a multi-tenant industrial estate.
Seven months ago Pelligra spent $25.3m on a 20.8ha parcel in Melbourne’s west Ravenhall, part of which is expected to be sold down after a subdivision.
The developer also owns Brooklyn’s former Huntsman factory, picking up the 39ha holding in September, 2018, again following an off-market deal.
Its development pipeline includes office and residential product, too.
A month before buying the Huntsman site, it co-purchased a collection of Richmond properties, including the ex-SEN Radio office, with the intention of creating a landmark mixed-use complex.