Prestons warehouse trades at record low 3.35pc yield

Centuria recently paid a price reflecting a 3.6 per cent yield for a Fairfield East industrial investment.

A warehouse under construction at Prestons has sold to Pittwater Industrial for $58.255 million reflecting a record low yield for a property of this type – 3.35 per cent.

On 2.72 hectares, 5 Yarrawa Street (pictured, top), with extensive frontage to the M7 Motorway, will contain a c15,028 square metre office/warehouse pre-committed for seven years to container logistics operator, ACFS.

The vendor, Loftex Property Group, outlaid $15.23m for the land in 2019.

It is understood to be spending that amount again constructing the investment.

Practical completion is scheduled this year.

Prestons is about 37 kilometres south west of Sydney. 

Record low yield, again

At 3.35pc, the return for 5 Yarrawa St smashes the benchmark 3.6pc, set last September when Centuria paid $200.2m for a Fairfield East, Sydney, warehouse leased to DB Schenker and Fantastic Furniture (story continues below).

Not long earlier, Lendlease acquired an Eastern Creek distribution centre occupied by Best & Less, for $130.1m, reflecting a 3.62pc yield.

Also last year the same buyer purchased a portfolio of three east coast warehouses from Mirvac, which managed them for Morgan Stanley Real Estate Investing, for $161m – a four pc return.

A similar yield was struck when Dexus paid McPhee Transport director Jay McPhee $186m for four new, leased investments, three of which were in Brisbane.

Like 5 Yarrawa St, those assets offer the owner significant depreciation benefits and taxation savings.

JLL’s Roger Miller, Tony Iuliano, Charlton Holmes and Harry Hyslop represented Loftex.

Their sale comes four months since Pittwater paid Gsan $34.25m for a 3.12ha industrial investment at Milperra, about 13 kilometres closer to the Sydney CBD than Prestons.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of