GARDA Property Group has announced the sale of three non-core asset, all above book value, totalling $30.6 million and has progressed lease commitments to its Wacol, Berrinba and Botannic 9 assets.
Garda had previously advised that it would be selling their Archerfield, Lytton and Varsity Lakes assets.
In updating the market, the Group have confirmed that the Archerfield property is now unconditional for $7.0 million, representing a 12.9% premium to its independent valuation. The warehouse is situated in the western corridor, with two street frontages on to Beaudesert Road and Boniface Street and is in close proximity to the Archerfield Airport and Acacia Ridge intermodal facility. The 15,000m² site is improved with a freestanding warehouse and transport depot that includes large office-showroom component with warehouse behind. The property comprises 4,524m² of lettable area, leased to four tenants. The June 2020 valuation adopted a cap rate of 7.25%. The adopted rent against the acquisition price equates to a yield of 6.4%.
Lytton is under contract for $11.0 million, representing a 26.1% premium to its independent valuation and is subject to GARDA completing certain works. The warehouse at 142-150 Benjamin Place, provides 5,677sqm of NLA and is configured to provide three separate tenancies with each offering quality clear span warehouse space with generous floor to ceiling heights. The June 2020 valuation adopted a cap rate of 7.25%. The adopted rent against the acquisition price equates to a yield of 5.75%.
The Varsity Lakes asset has also been sold for $12.6 million, representing a 5% premium to its independent valuation. The property at 154 Varsity Parade is improved with a modern three level commercial office building offering 3,994m² constructed circa 2009, comprising basement parking for 130 vehicles and three upper levels of office accommodation. The June 2020 valuation adopted a cap rate of 8.5%. The adopted rent against the acquisition price equates to a yield of 8.0%.
Settlement of all three assets is expected by the end of May 2021 with the net sale proceeds directed to debt reduction and ultimately utilised for the industrial development pipeline, including for the completion of Building C at Wacol which is due for completion by the end of May 2021 and also the first stage of 69 Peterkin Street, Acacia Ridge where demolition of the original structure is now complete.
Wacol is a 6,000m² facility, pre-committed to YHI Australia for a lease term of 10 years and 5 months and will contribute $0.7 million in gross income (annualised).
Stage-one of 69 Peterkin Street, Acacia Ridge is now also underway with the demolition of the existing building recently completed. This 6,200m² facility is pre-committed to Austrans for a term of seven years and will provide $0.8million in gross income (annualised). Construction of the facility will be completed by the end of CY21 at a cost of $7.6 million. There is room for a further 6,000m² to be built at this property.
In other leasing news, Garda has entered into a HOA for the remaining 2,726m² at Berrinba to the Australian subsidiary of a large American multinational group. The HOA is for a term of 5 years with the lease planned to begin in August 2021. The Berrinba development was a speculative built industrial development, and construction was completed in late 2020.
The leasing of Botannica 9 continues to be slow however, a US based medical device company, NuVasive has leased the remaining 365m² of NLA available on the ground level. The lease will begin in June 2021 for a term of five years.
47% of Botanicca 9 expected revenue is now committed and provides a 4.6-year WALE. A further 4,264m² of NLA, being the top three floors, remain to be leased.
As a result of the various changes in the portfolio, GARDA will seek independent valuations across approximately two-thirds of its portfolio. These valuations and resultant NTA movements will be disclosed upon completion of all valuations in May 2021.
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