Weekly Transaction Update - 21st Jan
For Week ending 21st January
This last week has seen activity increase a little further with 8 significant transactions across the market valued at $437M vs the $252M for the previous fortnight. January 2017 is shaping up to be well down on last years transaction count of 31 transactions worth over $2.8B, however last year was an extraordinary year with 8 transactions over $100m, most of which were likely hang-overs from activity in December 2015.
Aqualand' s purchase of 12.5 hectares of land at Baulkham Hills for $90M appears to be an extraordinary high price for vacant land at approx $7.2M per hectare. With a current development potential of 72 large lots (780sqm) and 75 townhouse lots, the land price represents a staggering $600k per lot. The site is 700 metres from the future Norwest Metro station and next to the Norwest business park. We naturally expect Aqualand to pursue a more dense development option. The NSW State Government is considering changes to the Housing Code and options may emerge in State Policy to allow smaller lots to be developed.
Investec were active this week, picking up 2 assets from Blackstone. The first, in Macquarie Park for 7.0% yield and the second in Frenches Forest for 7.5% yield. Both buildings are approx 15,500sqm with the Frenches Forest asset comprising a mix of office and warehouse space, whilst Macquaire Park is pure office with a lease to Honeywell.
The sale of the Sunbury Bulk Goods Centre was worth a look at this week. The Vendor, H Troon turned an old Bunnings store into 6 bulky goods outlets, leasing the all up over the past 18 months and now selling the asset for $14.8M on a sharp yield of 6.8%.
Also this week, we saw LaSalle Investment Management continue their acquisition campaign of assets in Brisbane picking up the Post Office Square retail complex for $95M. The property includes a 316 bay car park which is itself is worth approx $34M (based on 45 Charolette Street). The asset last traded in late 2014 when Colonial sold the property for $67m to a JV between Marquette Properties, Trident Corp, Ash Morgan and Bricktop. At that time, the asset was looking tierd and had a WALE of less than 1 year. During due diligence, the Marquette JV locked in a new 15 year lease from Secure Parking (probably securing a better val from day 1) and shortly after settlement renegotiated six of the sitting tenant’s leases to significantly increase the WALE and deliver a major refurbishment of the food court for circa$5m. The Marquette JV have now sold the asset to LIM for some $28M more than their acquisition price with a potential profit of some $20M+, in just over 2 years. Not bad hey !. Well done. The lesson here is that untapped value can only be properly understood by a deep understanding for the local market a thorough assessment of the current asset. Many people would have seen this asset with a 1 year WALE as problematic rather than for the opportunity that it actually presented.
Scoll through the list below or head to the Australian Property Transaction Data Map for further details.
This Weeks deals