EG Funds sells its Kensington properties through Savills

Real estate fund manager EG Funds Management has secured the off-market sale of two commercial assets in Kensington, Melbourne.

The combined 15,725sqm site area was sold for $30.25 million.

The Young Husband Wool Stores sites were acquired in two tranches by EG Funds Management in 2007 and 2011 for AU$8.9 million and $5.5 million respectively.

The sites underwent a successful rezoning in 2015 from IN1 and IN3 (Industrial) to Commercial 2 zoning.

The strong market appetite for well-located assets delivering passing yield while allowing future land use change potential has also benefited these sites, said EG's Daniel Farley.

EG purchased the two assets for the Yield Plus Infrastructure Fund No. 1, which was launched in 2006 to acquire assets near new or upgraded infrastructure.

The fund is on track to achieve 13.0% p.a. Equity IRR.

The transaction was concluded through Ben Hegerty and Chris Jones from Savills.

Impact Investment Group, a Melbourne-based syndicator backed by the wealthy Liberman family, bought the converted warehouse on a yield of around 5 per cent, but with considerable rental upside.