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Industrial Market Update Q4, 2018

December 7, 2018

The Industrial sector has become the flavour of the year with activity already surpassing last years total by approx 10%, with over $3.6bn in industrial deals completed.

 

The weight of capital seeking assets in the sector has pushed the weighted average yields to a low of 5.7%, down 90bs on December last year.

 

We recorded a total of 140 separate transactions across Australia, up marginally on 133 last year.

 

 

The largest single asset deal we found was the sale of 50% of 1 Aviation Rd, Hoxton Park. This asset is held in a partnership between Mirvac and JP Morgan, however this week a transfer was registered at $170.5M (equal to Mirvac's current reported book value for 50%). Whilst unconfirmed we suspect this is related to either the transfer of the assets from Aviva Investors to JP Morgan following the deal that was announced back in late 2014 or a subsequent move of the asset within JP Morgan to a new client. Mirvac's valuation was reportedly based on a 5.2% cap rate. The 138,607sqm facility sits on 30ha of land with Woolworths and DB Schenker as major tenants.

 

Qualities however secured a larger deal overall with the $385M acquisition of the Allied Pinnacle Portfolio of 10 assets.

 

Other major investors this year were Charter Hall, Blackstone, the Mirvac Industrial Logistics Trust and Logos.

 

The key sellers this year were Allied Pinnacle, Mirvac (but only to a related entity), Frasers, Construct and Invesco Real Estate.

 

 

 

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