Propertylink adds 10 industrial properties to portfolio
Propertylink announced it has acquired 10 industrial properties in NSW and Victoria from Abacus Property Group and Abacus Diversified Income Fund II for $106.75 million.
Led by former Valad chief Stephen Day, it takes the total value of the Propertylink Australian Industrial Partnership (PAIP) assets to $203 million.
Day says that the acquisitions demonstrate their intention to increase their industrial property holdings Australia wide.
“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 [Weighted Average Leases to Expiry] which present an opportunity for Propertylink to add value or to achieve higher yields and total returns with hands on asset management,” said Day.
“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.”
According to Peter McDonald, head of property at Propertylink, there are potential plans to subdivide the assets.
“The portfolio will benefit from strong asset management and we’ll create significant upside by knuckling down and really working the assets,” says McDonald.
“The 9.4% 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”, he says.
The Abacus portfolio is the largest acquisition since PAIP was established in March 2014. A separate Propertylink fund acquired two long lease industrial assets for $63 million in October last year.
PAIP now comprises 17 assets Australia-wide, with backing from Goldman Sachs and London-based Grosvenor Group.
Four of the properties were held on the Abacus balance sheet and six were in an unlisted retail fund it managed.
The sales were above the aggregate book value, Abacus managing director Dr Frank Wolf said.
The entire portfolio has a 97% occupancy.
The Abacus deal was brokered by CBRE agent Matt Haddon and Colliers agent Tony Iuliano.