Published in The Australian Financial Review on 12th December 2016, written by Matthew Cranston.
Listed property investor and fund manager Propertylink has paid $46.6 million for a new warehouse in Western Sydney, recently leased to online fashion retailer The Iconic.
The Australian Financial Review revealed last week that The Iconic had struck a new seven-year lease for a 19,100-square-metre warehouse at 205-231 Fairfield Road, Yennora, paying annual net rent of $2.05 million plus GST.
The 31,086sq m A-grade industrial property, which Propertylink has acquired from a private investor on a 7.4 per cent initial yield, is set on a 5.5-hectare site with a weighted average lease expiry of 6.6 years.
It will sit within the Propertylink Australian Industrial Partnership II fund, which now extends to 11 properties worth a combined $220 million. Settlement is due to occur by February next year.
Propertylink noted the growth of The Iconic, which sold more than $100 million of merchandise last year, reflected a broader trend of e-commerce, growing faster than total retail sales in Australia, resulting in demand for large format logistics facilities.
“A real feature of the current cycle is the fundamental change in the way supply chains are designed and implemented, largely due to structural changes brought about by e-commerce,” said Peter McDonald, Propertylink’s head of property.
“This has led to increased demand for industrial property in a wide variety of types and locations beyond just the standard big-box warehouse located on major arterial roads,” he said.
The sale of the Yennora warehouse was negotiated by Elijah Shakir of CBRE.
Propertylink, which is trading well below its 89¢ August issue price, has more than $1.7 billion of funds under management including funds managed on behalf of Goldman Sachs, Grosvenor Group, The Townsend Group and Chinese conglomerate Fosun.
“PAIP II’s strategy is to maximise returns for our clients by acquiring industrial, warehouse and logistics assets in Australia where we can generate further value through active management, lease renewals, targeted capital expenditure and timely disposals,” said Propertylink CEO Stuart Dawes.