SA Police impound yard fetches $21.5m
A South Australia Police backed industrial investment has traded following an off-market deal.
Pep Rocca’s funds management division Curated Capital has paid $21.5 million for 5 Talisman Avenue, Edwardstown (pictured, top) – the Southern Metropolitan Impound yard.
MA Financial was the seller.
It paid $21.15m in mid-2022.
The divestment was brokered off-market.
The result reflects a 4.74 per cent net passing yield.
Knight Frank’s Max Frohlich and Ryan Mills were the agents.
The deal comes three months since realestatesource.com.,au reported Curated Capital sold an Adelaide CBD office and adjoining 140-bay car park.
Low yield
On a 1.57 hectare island site off South Road, 5 Talisman Ave contains a 9856 square metre office/warehouse.
The state government, through SAPOL, pays $1.02m annual net rent – said to be about 35 per cent below the market rate.
“Our strategy is straightforward: we intend to extend SAPOL’s tenancy and hold the underlying land,” Curated Capital director, Alessio Roscio, said.
“Island sites this close to the CBD rarely come to market, and in a tight infill precinct like Edwardstown, land of this scale simply isn’t being replaced,” he added (continues below).
“We’re comfortable taking a patient, long-term view on the real estate while the government tenancy continues to underpin the holding,” according to the executive.
Underlying land value
Edwardstown is eight kilometres south of Adelaide’s CBD.
“The property offers a rare combination of scale, underlying land value and security of income, with a secure government covenant, fixed annual rental growth and meaningful rental reversion,” Mr Frohlich said.
“Assets with these attributes are increasingly difficult to replicate, and capital is responding accordingly,” according to the executive.
Mr Mills added Adelaide’s industrial market continued to record low vacancy, with conditions particularly tight in the inner south.
“Conditions are incrementally tighter in the inner south submarket, where constrained supply continues to meet strong occupier demand, and incentives remain the lowest of the major capitals nationally, supporting continued rental growth across key precincts,” he said.
“The inner south has seen some of the strongest growth in land values in Adelaide’s industrial market,” he added.
“The supply side of the precinct has also shifted structurally….the $15.4 billion River Torrens to Darlington Project, the largest infrastructure undertaking in South Australia’s history, has required the acquisition of more than 500 properties along the South Road corridor, permanently withdrawing land from the market and displacing occupiers into an already tightly held precinct,” according to the executive.
“Infill locations such as Edwardstown are particularly sought after, given their proximity to the CBD, access to major transport corridors and limited availability of comparable assets”.
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