Connect with us

commercial

E-Commerce Growth Drives Queensland Logistics Investment

Logistics Investment

Industrial and logistics property has remained one of the few corners of the commercial real estate market to ride through the disruption of the pandemic relatively untouched.

Demand for logistics space, particularly in Brisbane, has been underpinned by several structural demand drivers, including a fast-growing e-commerce sector and resilient domestic consumption.

In Queensland, e-commerce logistics distribution and warehousing have shown strong growth of 5.2 percent annually, the highest of any state nationally.

Last week, Singaporean property fund manager Mapletree finalised the purchase of 36 hectares of industrial land on Brisbane’s outskirts in a deal worth $90.7 million.

The site, which was sold by Brisbane-based developer Pointcorp, will now form part of the proposed $1.5 billion, 157-hectare Crestmead Logistics Estate, located on the corner of Green and Clarke Road south of the Logan Motorway corridor in Brisbane.

The site for the nine-stage estate, which is mooted to deliver 650,000sq m of warehousing, business, logistics and manufacturing buildings, was amalgamated over a five-year period by Pointcorp.

Logistics Investment

The site will now be developed into the Mapletree Logistics Estate with construction commencing and delivery expected last quarter 2021.

According to a recent report by Colliers International, Brisbane’s industrial sale and leaseback transactions have continued to strengthen throughout the pandemic, reaching $272 million between January and September 2020.

“Industrial assets in the Greater Brisbane region have consolidated as a defensive and mainstream investment during the pandemic,” Colliers International associate director of research Karina Salas said.

“Over the past 10 years to December 2019, industrial sales volumes comprised an average of 21 percent of the volume of commercial property sales within the region.

“Over the past three quarters to September 2020, this contribution has increased to 63 percent, driven by its appeal as a defensive asset class during the pandemic.”

Last month, Mapletree secured 55,000sq m of space at the Acacia Ridge distribution centre on Bradman Street, which was sold on a sharp 5 percent yield by Blackstone for $114 million.

The Acacia Ridge Business Park lies within an established industrial precinct, about 13 kilometres south of the Brisbane CBD, and was previously known as the Fox Road Industrial Estate.

One of the key factors in favour of the Acacia Ridge precinct, according to Mapletree, was its existing transport infrastructure, but also connectivity to forthcoming projects, especially the inland freight rail connecting Melbourne and Brisbane.

Also, bolstering investment has been the delivery of Brisbane Airport’s second runway and improvement works to the Port of Brisbane.

The Acacia Ridge deal follows Blackstone’s divestment of another 18-hectare site within the same industrial park to ESR for $90 million in early October.

Stockland and joint venture partner Fife Group also moved to secure a 21.25-hectare industrial development site in Brisbane’s south for $41.5 million.

Also in Brisbane, an industrial asset at 37 Gravel Pit Road in Darra was acquired following a capital raising by Trilogy Funds Management, which saw investors put $18 million into the Trilogy Industrial Property Trust within one week.

Trilogy’s latest Darra purchase, 17.6 kilometres south-west of Brisbane city, marks the trust’s first industrial property purchase in Brisbane, taking the total value of its property portfolio to almost $70 million across seven properties.

Earlier this year, Mapletree Logistics Trust snapped up a newly-built A-grade logistics facility at 114 Rudd Street, Inala for $21.25 million.

The warehouse, completed at the beginning of the year, will be taken by Decina Bathroomware after agreeing to a 10-year lease.

Last year, Australia’s most successful logistics real estate player, Goodman Group, completed the largest parcel facility and delivery centre in the southern hemisphere for Australia Post.

Covering almost 10 football fields at Goodman’s Redbank Motorway Estate in the City of Ipswich, Queensland, Australia Post signed a 15-year lease on the 13.5-hectare site and invested more than $200 million in the new hub.

 

The post “E-Commerce Growth Drives Queensland Logistics Investment” by Ted Tabet appeared first on the theurbandeveloper.com Blog

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Brisbane

Mirvac Sells Golden Triangle Tower for $87m

Golden Triangle Tower

Melbourne-based property fund manager Forza Capital has picked up a prominent office building in Brisbane’s “Golden Triangle” from Mirvac for $86.7 million.

The property, located at 340 Adelaide Street—on the corner of Adelaide and Wharf Streets, comprises 12,800sq m of B-Grade office space across 17-levels, together with a ground floor cafe and parking for 100 cars.

In recent years, Mirvac has refurbished the building, upgrading the lobby and repositioning the external ground plane and retail.

Mirvac chief investment officer Brett Draffen said the proceeds from the sale will be redeployed into prime and A-grade commercial assets as well as its $22.4 billion development pipeline across the residential, office and industrial sectors.

The deal, negotiated by CBRE’s Flint Davidson, Tom Phipps and Bruce Baker, represents an 11 per cent premium to its book value in June.

“As the first major, post-Covid capital markets transaction in the Brisbane CBD, this deal highlights the demand from onshore investors for quality office assets,” Phipps said.

Golden Triangle Tower1

The building is 93 per cent leased to tenants Covermore, Cerebral Palsy League and Oracle, and has a weighted average lease expiry of 3.8 years. Image: Supplied

“As travel restrictions ease we expect the market to awaken in the first half of next year fuelled by historically low financing costs and Brisbane’s attractive yield spread.”

Forza Capital director Ashley Wain said the asset represented exceptional value, given the building’s comprehensive refurbishment program, and was transacted with a high degree of certainty over a period of one month.

“Shortly after Covid struck, [we] identified the opportunity to prepare our investor base of sophisticated investors for opportunistic property investments.

“Speed to transact was anticipated to be critical and we believed getting early capital commitments and being able to transact quickly would be paramount to securing new investments on attractive metrics,” Wain said.

The acquisition represented $52.5 million of equity from Forza’s client base of family offices, high net worth advisory groups and individuals, and will now sit in the newly-established Forza 340 Adelaide Street Fund.

“The uncertainty in office investment markets has created really attractive investment metrics which, when combined with highly competitive debt funding, results in a target 8 per cent per annum distribution yield over the first five years of the investment,” Wain said.

Last week, Dexus listed a neighbouring A-grade office tower, located at 10 Eagle Street, with price expectations of $300 million.

 

The post “Mirvac Sells Golden Triangle Tower for $87m” by Ted Tabet appeared first on the theurbandeveloper.com Blog

Continue Reading

Brisbane

Mirvac offloads Brisbane office building for $87m

Mirvac office building

Mirvac has offloaded a 17-storey office building in Brisbane to Melbourne-based property fund manager Forza Capital for $86.75 million in one of the first institutional grade office deals to take place in the city since COVID-19 struck.

The building, which is in Brisbane’s ‘Golden Triangle’ at 340 Adelaide Street, had undergone an extensive refurbishment by Mirvac and sold at an 11 per cent premium to its last book valuation in June.

The property, which is 93 per cent leased to tenants such as Oracle, Cover-more Insurance and the Attorney General’s Office, has a 3.8 year weighted average lease expiry.

Brett Draffen, chief investment officer at Mirvac, said proceeds from the sale would be redeployed to grow its asset creation business and would allow the group to “capitalise on opportunities to create Australia’s next generation of workplaces, residential communities and mixed-use precincts”.

The office tower is the first asset to be acquired by Forza Capital following a $240 million capital raising from its client base of family offices and high net worth advisory groups in September and will sit in the newly established Forza 340 Adelaide Street Fund.

Forza Capital director Adam Murchie said they had advised their investor base to be prepared for opportunistic property investments shortly after COVID-19 had struck.

“Speed to transact was anticipated to be critical and we believed getting early capital commitments and being able to transact quickly would be paramount to securing new investments on attractive metrics.”

Forza Capital director Ashley Wain said the uncertainty in the office market had created attractive investment metrics.

“When combined with highly competitive debt funding [the metrics] result in a target eight per cent per annum distribution yield over the first five years of the investment.”

The deal was negotiated by CBRE’s Flint Davidson, Tom Phipps and Bruce Baker, and Matt Lawrence arranging the debt.

“As the first major, post-COVID capital markets transaction in the Brisbane CBD, this deal highlights the demand from onshore investors for quality office assets,” Mr Phipps said.

“As travel restrictions ease we expect the market to awaken in the first half of next year fuelled by historically low financing costs and Brisbane’s attractive yield spread.”

 

The post “Mirvac offloads Brisbane office building for $87m” appeared first on the afr.com Blog
Continue Reading

Brisbane

Demand Soars for Industrial Floorspace

Industrial Floorspace

Demand for industrial floorspace has continued to strengthen in the third quarter, with expectations that take-up of space will surpass the 10-year average at year’s end.

According to JLL’s research figures for the September quarter, national take-up so far this year has now reached 2 million square metres, with leasing activity at the highest level recorded since early-2015.

Driving the sector—as it did pre-Covid-19—has been a push for more automated warehouses to cater for the acceleration in online shopping and a more digitally-connected consumer.

Take-up over the third quarter has been led by Sydney, where 225,000sq m of industrial space was absorbed, and Melbourne where 235,100sq m was taken off the market.

Together, Australia’s two biggest cities captured 74 per cent of the nation’s total take-up across the quarter.

In Sydney, retail giants such as Williams-Sonoma and Amazon have signed up to new warehouses in the west, while the tech giant has also moved into a new facility at Dexus’ industrial estate in Ravenhall, Melbourne—doubling its operational footprint in Victoria.

JLL Australia head of industrial and logistics Jamie Guerra said the increase in demand from tenants looking for industrial space had been a nationwide trend.

Industrial Floorspace Gross Take-Up, Australia

Industrial Floorspasces

^ Source: JLL Research, by city, as at 3Q 2020 

“We have also seen an uptick in take-up activity for Adelaide and Perth over the quarter, reflecting a strong return in confidence in these markets post-Covid.

“The Adelaide market recorded a relatively significant rise in take-up—the largest volume since the fourth quarter of 2018.”

In Brisbane, the Charter Hall Prime Industrial Fund recently completed a new facility for a major global logistics company and signed new leases with Amazon and Australia Post at the TradeCoast Industrial Park in Pinkenba.

The acceleration of e-commerce has been driving demand for urban infill locations.

Australia’s e-commerce penetration has now reached a record 12 per cent as of August—a significant jump from 9.3 per cent in January.

JLL said rental growth has been stronger for inner-ring locations across major markets in Australia.

JLL’s Tony Iuliano said global capital will continue to be attracted to Australia’s industrial investment markets due to the country’s “safe haven” status, relatively resilient economy, dynamic industries and high innovation and skills.

“Investment appetite for the industrial sector has been consistently strong over 2020, which is maintaining competition and accelerating the upward pressure on pricing relative to commercial office markets.

“With manufacturing accounting for more than 20 per cent of gross take-up of industrial space in Melbourne and Sydney over the past 10 years, the announcement in the federal budget of the $1.5 billion Modern Manufacturing Strategy will add to growth of industrial and logistics space in both states,” Iuliano said.

According to recent findings from Colliers International, Sydney’s capital values for industrial property lifted to $2,732 per square metre in the third quarter of the year, from $2,700 in the first quarter.

Over the same period, prime Sydney yields tightened to 4.66 per cent from 4.75 per cent.

Melbourne industrial capital values rose 6 per cent between the first and third quarter of the year to $1,733 per square metre, while prime yields tightened by 31 basis points to 5.25 per cent.

ESR Absorbs 11-Asset Portfolio for $300m

Meanwhile, logistics giant ESR has absorbed a portfolio of logistics assets along the eastern seaboard from an ESR-managed partnership, Propertylink.

ESR has outlaid $302.5 million for 11 assets primarily located in the eastern seaboard cities of Sydney, Melbourne and Brisbane.

“This transaction represents a great outcome for our investors in both investment vehicles and our business,” ESR Australia chief executive Phil Pearce said.

“Propertylink Australian Industrial Partnership II (PAIP II), investors are achieving an exit in line with the fund’s original strategy.”

The acquisition will take gross assets in ESR’s Australia Logistics Partnership (EALP) to over $1 billion—spread across 36 properties with a gross floor area of over 500,000 square metres.

 

The post “Demand Soars for Industrial Floorspace” by Ted Tabet appeared first on the theurbandeveloper.com Blog

Continue Reading

Positive Cashflow Property

duplex designs, dual occupancy homes

Property Investment Advice

Trending