RF CorVal spends $34.5m for industrial fund

Warehouse B, 73-85 Carroll Road, will soon be offered for lease.


RF CorVal has added a couple of assets to its two year old Industrial Infill Trust (RIIT).

Sector is replacing the ex-Atari headquarters, abutting RF CorVal’s Oakleigh South site, with a multi-level self storage facility.

In Adelaide’s Wingfield and Oakleigh South, in Melbourne, the $34.5 million spend reflects a 4.6 per cent net passing yield.

A Crestmead asset, one of four RF CorVal recently bought from Properties & Pathways for the infill industrial trust.

About a third of the bigger Victorian property is vacant.

Assuming it weren’t and the assets are upgraded – something RF CorVal said it planned to do when it tapped investors for up to $43m in June – the blended market return is 6.7pc.

Alceon banks capital gain at Oakleigh South

Alceon sold the biggest property, 73-85 Carroll Road, Oakleigh South, for $25.5m – a significant rise on the $18.744m it paid in mid-2021.

Once (before 2008) owned by CSR for its then Viridian Glass arm, one of the two sprinklered warehouses, with 8475 square metres, is still occupied by a glass maker, trading as Melbourne Safety Glass, or MS Glass, on a lease expiring in 2026.

It pays annual rent of $973,245.

After it moves out, a cosmetic refurbishment is planned including with a new roof.

The second office/warehouse, of 4276 sqm, is vacant.

Here, RF CorVal is planning to extend the office, refresh the exterior – also with a new roof – and stock it with sustainability initiatives, before leasing it out, likely this year.

Cushman & Wakefield’s Adrian Rowse, Chris Jones, Gareth Jackson and Charlie Holmes represented Alceon (story continues below).

Baiada Poultry just vacated 22-24 Hakkinen Road, Wingfield.

Lease, sale deal in Adelaide

In Adelaide’s north Wingfield, meanwhile, RF CorVal has purchased a cold storage facility on 4979 sqm at 22-24 Hakkinen Road, from Baiada Poultry, which just vacated.

The Adelaide property was leased prior to settlement with the promise of a $1.8 million refurbishment.

Prior to settlement, the manager secured a seven year lease to Superior Foods – conditional on the trust spending about another $1.8m on a full refurbishment of the 2711 sqm space.

RF CorVal recently bought a Hemmant hardstand investment for the infill industrial trust.

Based on the approximate starting annual rent then (as per a draft lease detailed to potential unitholders in June), and the $9m purchase price, this deal is being struck at a 6.6pc yield.

Factoring in the capital expenditure – an incentive – the return is 5.5pc. Colliers’ Paul Tierney and Tom Barrett brokered the sale.

Fund after deals

Following the Oakleigh South and Wingfield deals, RIIT, which seeks large sites with development upside in high demand areas, holds 13 investments worth a total $166.4m.

Eighteen tenant clients lease the c81,407 sqm of lettable area; the Oakleigh South property is the only one in the portfolio carrying a vacancy. The WALE by income is 4.8 years – down from five.

All up, improvements cover 42pc of the portfolio’s 19.4ha of land – up from 39pc.

The group, for the trust, is behind another Melbourne purchase, in Dandenong South, which will lift the portfolio value to near $200m and change these weightings. This will be covered in a separate story.

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Marc Pallisco

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