Prestons logistics asset transacts for $58.255 million at 3.35%

31 March 2022

A premium institutional-grade logistics facility in the heart of Australia’s supply chain network has been acquired by Pittwater Industrial for $58,255,000, at a yield of 3.35%, as the competition for quality logistics assets continues, fueled by the ever-increasing capital pool.

JLL’s Roger Miller and Tony Iuliano exclusively brokered the deal for 5 Yarrawa Street, Prestons on behalf of Loftex Property, via an on-market International Expressions-of-Interest campaign.

Situated in an established industrial precinct the Prestons property occupies a 2.723ha corner site with a brand-new logistics facility totalling 15,066 sqm of premium quality improvements and immediate access and exposure to the M7 Motorway. The asset, which was speculatively developed, was pre-committed to Australia’s largest privately owned freight logistics operator, ACFS Port Logistics. ACFS committed to a 7-year WALE from practical completion.

$1.32 billion worth of transactions for industrial assets in NSW were recorded in by JLL Research in 4Q21 alone. This quarter’s transactions were the highest level on record for the second consecutive quarter, surpassing $1 billion for the second time since 4Q15.

JLL’s Capital Markets Industrial & Logistics (NSW) Senior Director, Roger Miller said, “Despite the broader economic headwinds experienced across Australia as a result of ongoing disruptions of COVID-19, there has been significant yield compression recorded over the previous 12 months. This is a result of the ongoing weight of capital seeking exposure to the logistics sector in core markets and the current imbalance of quality opportunities to meet this insatiable demand.

“We are seeing the results of the e-commerce boom continue to push occupancy demand for industrial assets. In support of this theme, the Prestons property generated significant interest from both domestic and overseas capital. Additionally, our client’s foresight to develop the improvements to a premium quality proved astute,” said Mr Miller.

Award winning developers Loftex Property acquired the land in 2019, and speculatively developed the site into an institutional grade logistics facility of the highest quality in design, construction, and sustainability.

JLL’s Head of Capital Markets Industrial & Logistics – Australia, Tony Iuliano said, “The race to net-zero has increased demand for sustainable industrial assets, at a time where demand for these assets is already outstripping supply. Tenants and investors alike want facilities with sustainable features, where these efficiencies can reduce operating costs and align with the long-term sustainability goals of companies. As a result, these premium assets come with a premium price tag.”

Purchaser Pittwater Industrial acquired this asset to complement their recent purchase of 373 Horsley Road, Milperra, a development site capable of producing approximately 19,000 sqm of high-quality logistics premises, set to be available in 2023.

Pittwater Industrial’s Chief Investment Officer, Andy Stubbs said, “Assets of such high-quality amenity, location and tenant covenant provides the perfect foundation for our business to look to the future with confidence. Regardless of the prevailing market conditions, Prestons will continue to remain relevant and resilient.”

The state-of-the-art facility has left no stone unturned when it comes to sustainability, with an extensive array of premium unique features including LED lighting, translucent roof panels, rainwater harvesting, smart metering and solar paneling to the premises roof. The warehouse boasts full insulation on the northwestern and western walls, a rare sustainability characteristic of similar industrial assets. An onsite substation provides 1000KV of power whilst still preserving the extensive environmental sustainability rating through use of a 200kw solar PV.