A fully-leased industrial property in Adelaide’s inner north has sold for $11 million in an off-market transaction, as demand for core-plus investments in the sector remains strong.
The property at 591A Grand Junction Road is a freestanding industrial office/warehouse facility approximately 10 kilometres north of the Adelaide CBD within the established industrial precinct of Gepps Cross.
The asset comprises approximately 4,912sq m of net lettable area on a 13,449sq m site, with functional warehouse accommodation, ancillary office space, bitumen-sealed hardstand areas, onsite car parking and heavy vehicle loading access.
The property is fully leased to Toll Transport Pty Ltd, trading as Toll Chemical Services, a wholly owned subsidiary of Japan Post and one of the Asia-Pacific region’s largest logistics operators, providing road, rail, sea and warehousing services nationwide.
The tenant has exercised a further three-year term commencing August 2024, with four additional three-year options remaining. The tenant’s established operations at the site, together with its strategic freight connectivity, purpose-built chemical storage and handling fit-out and the associated dangerous goods approvals, make the location costly and time-consuming to replicate, reinforcing the likelihood of long-term occupancy.
The asset was purchased by a local private investor from another, in a transaction negotiated by Knight Frank’s Max Frohlich and Ryan Mills.
The property generates a passing net income of approximately $563,000 per annum, reflecting an initial yield of 5.12 per cent. The passing rental sits around 20 per cent below assessed market levels, offering the purchaser near-term reversionary upside.
Positioned on Grand Junction Road, the property offers strong east-west connectivity, with direct access to Port Wakefield Road, South Road and the Northern Connector, supporting efficient freight movement.
Mr Frohlich said the sale reflected ongoing demand for quality industrial investments in Adelaide’s tightly held infill markets.
“This transaction demonstrates the strength of investor demand for well-located industrial assets leased to high-quality occupiers,” he said.
“The property offered investors secure income backed by Toll Transport, strong underlying land value and excellent connectivity to major freight infrastructure, all of which continue to underpin buyer demand in Adelaide’s industrial sector.”
Mr Mills said investors were increasingly attracted to opportunities offering both income security and rental growth potential.
“Assets that provide immediate income together with clear reversionary upside remain highly sought after in the current market,” he said.
“In this case, the rental rate sits below market levels, creating an opportunity for future income growth while benefiting from a strategic location within one of Adelaide’s most established industrial precincts.
“Industrial fundamentals across Adelaide remain strong, with low vacancy levels, constrained supply and continued demand from transport, logistics and warehousing operators supporting investment activity.”
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