Dexus Industria REIT acquires last mile industrial development

13 October 2021

Dexus Industria REIT has today announced it has agreed to acquire a 50% interest in 12 Church Street, Moorebank, NSW. The property will be acquired in joint venture with Dexus (Industria 50%; Dexus 50%) for $40m.

Dexus Industria’s share of the acquisition costs, including stamp duty, will be approximately $22 million.

Property transaction records indicate that the property was actually acquired for $45.43m.

The property was acquired off market from a private investor following a devastating fire in July 2020 which destroyed the previous industrial warehouse structure.

Dexus will acquire the property as a development opportunity, which is anticipated to complete in mid-2024, and will deliver approximately 34,000 square metres of multi-level warehousing across 15 to 20 units. Industria’s share of the development costs is approximately $40 million.

Moorebank is a major last mile logistics hub located within the local government area that is ranked the 4th highest for online buying (by volume) in Australia. There is also a limited supply of premium small units for last mile users, including third party logistics operators and direct retailers. All these characteristics underpin the expected strong demand for the development.

Industria Fund Manager, Alex Abell, said: “This is a unique development opportunity located in a highly sought- after last mile industrial location. We expect this acquisition will deliver attractive returns and drive future growth consistent with Industria’s strategy that was outlined in the fund’s recent market equity raising announcements.

“The acquisition builds on recent momentum following the agreement to acquire $598 million of assets in September 2021, as we continue to leverage Dexus’s fully integrated platform to access deal flow, and benefit from its in-house development expertise and established customer relationships.”

The acquisition will be funded by existing debt capacity and, on completion of the transaction, assets with development exposure is projected to increase from 6% to 8% of Industria’s portfolio. There is no change to FY22 FFO and distribution guidance.

Settlement of the transaction is anticipated to occur on or around 25 October 2021.