EG’s Private Wealth Division Acquires Asset For Vineyard Property Trust22 February 2021
EG Funds Management has established a new unlisted vehicle to hold a multi tenanted industrial property at 172 Commercial Rd Vineyard.
The investment is one of many opportunities the EG Private Wealth Division is pursuing for investors. The division is targeting stable income cashflows and offering an average of 8.00% p.a., with the potential for capital growth.
Situated in the north-west growth corridor of Sydney, the property is 7km from the Rouse Hill Town Centre and within 50km of the Sydney CBD. The area is currently benefiting from an infrastructure boom as a result of the recently established Northwest Metro railway line and significant residential expansion through lot subdivision development, particularly in Kellyville and Box Hill.
“The Fund is looking to continue investing in multi-use industrial real estate, offering high income yield with strong capital-growth potential in important growth corridors,” said EG’s Head of Private Wealth Rodney Walt.
“The property, which is leased to 9 tenants with a WALE of 3.4 years was secured on an attractive 7% initial yield, with potential for rental growth through additional leasing and repositioning,” said Sean Fleming, Head of Capital Transactions.
The property is currently zoned Rural and whilst EG will continue to generate income from its existing improvements they will be hoping to secure a new residential zoning for the land as has occurred for land holdings east of Commercial Rd. Approximately 40% of the land is flood prone and will require significant environmental protection arrangements to provide for residential uses.
The purchase price has not yet been disclosed, but is likely to be far less than other zoned land. In January 2020, a 2ha residential zoned parcel at 238 Commercial Rd Vineyard sold for $7.5m ($370/sqm).
The transaction was brokered by Neil Cooke from Savills Australia and the property was acquired from Sydney developers Central Element, who are refining their focus towards inner city mixed use and hotel projects.
EG grows the wealth of their private investors through commercial property syndication opportunities. With above-average returns and capital security, EG takes a personalised and aligned approach to every opportunity.
EG use their risk management software to identify the opportunities, consider the risk and match the deal to the investor profile. EG’s disciplined, data-driven approach to risk management enables the safeguarding of investor funds whilst maximising returns.
Founded in 2000, EG manages $3.2 billion in real estate on behalf of super funds and private wealth clients to generate outstanding returns with lasting social impact. With $4.3 billion in development pipeline, and 16.7% per annum in realised IRR for institutional funds, EG is committed to finding a better path to better returns.
The acquisition of rural land is risky when the time frames for rezoning are not known. The Vineyard Box Hill area is attracting significant interest as was evidenced by Stocklands acquisition of a large land holding at Box Hill last year.
A 1.8ha Industrial zoned parcel of land sold in Vineyard in July 2020 at a rate of $836/sqm. The site has good exposure to Windsor Rd.