10 June 2014
Propertylink announced today that it had acquired 10 industrial properties from Abacus Property Group and Abacus Diversified Income Fund II for $106.75 million, bringing the total value of the Propertylink Australian Industrial Partnership (PAIP) assets to $203 million.
The Abacus portfolio is the largest acquisition since PAIP was established in March 2014. PAIP now comprises 17 assets Australia-wide.
“These acquisitions are evidence of our strategic intention to grow our industrial property holdings nationally,” said Propertylink Managing Director, Stephen Day.
“PAIP portfolio assets now range from some solid long lease assets with excellent tenant covenants blended with traditional multi-let estates and single tenant distribution centres with shorter WALEs which present an opportunity for Propertylink to add value or to achieve higher yields and total returns with hands on asset management.
“The PAIP industrial strategy is offering great “risk adjusted” returns in the current climate due to the light capital expenditure requirements, relatively low incentives required to secure tenants and, most importantly, strong capacity to achieve a high proportion of targeted total returns to investors coming from cash distributions from rental income.”
With all its assets located in Victoria and New South Wales, the Abacus deal delivers strong and stable cash flows to PAIP, and complements its current holdings in Brisbane, Sydney, Perth and Melbourne. The entire portfolio now has a 97 per cent occupancy with a weighted average lease expiry of 4 years.
Peter McDonald, Head of Property at Propertylink, said that “the portfolio will benefit from strong asset management and we’ll create significant upside by knuckling down and really working the assets.”
“The 9.4 percent property yield is very attractive, however our team is looking forward to working on the various value-add initiatives that include potential land sub-division, strata sub-division, and bulky goods development. We have just added former JLL director Casey Greenberg to the Propertylink Asset Management team and his appointment has come at an opportune time with this acquisition”, Mr McDonald said.
Matt Haddon of CBRE and Tony Iuliano of Colliers brokered the transaction.
Propertylink manages PAIP and is invested in it alongside core investors Goldman Sachs and Grosvenor Group (the privately-owned international property group). The vehicle has scope to expand the value of the total portfolio to $600M and is expected to announce further acquisitions in coming months.
PAIP is separate to the Propertylink fund that acquired 2 long lease industrial assets for $63m in October 2013. Propertylink will continue to seek long lease core opportunities for that fund in addition to assets for the PAIP.