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MELBOURNE INDUSTRIAL - Knight Frank€¦ · For the first time on record offshore buyers were most...
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RESEARCH MELBOURNE INDUSTRIAL TOP SALES TRANSACTIONS 2016 Key Facts Industrial sales in 2016 totalled $878.8 million across 27 transactions The Western region continued to lead all industrial precincts with sales totalling $455.6 million Yield compression continued with prime core market yields tightening by 29 basis points in 2016 For the first time on record offshore buyers were most active accounting for 28% of total sales by value Boosted by a number of large sales with three transactions above $50 million, industrial sales in 2016 totalled $878.8 million, the third highest level achieved on record. Investment demand across Melbourne’s industrial market remained strong in 2016 with sales volumes achieving the third highest annual level on record. Industrial investment sales activity ($10m+) in 2016 totalled $878.8 million across 27 properties. While 2015 was the highest total on record ($1.2 billion) volumes reached in 2016 were 65% ahead of the long term average. Whilst demand for prime industrial property remains strong, the significant weight of capital combined with the limited Core assets offered for sale has led to a rise in demand for secondary grade properties. As a result, prime yields compressed by 29 basis points in 2016 to range between 6.55% and 7.25% while secondary yields compressed by 56 basis points to range between 7.80% and 8.65%. Transactional activity was boosted by a number of significant sales with three transactions above $50 million recorded in the Melbourne industrial market over the past year. In addition, there were a number of key national portfolio sales that included Melbourne assets with Growthpoint’s portfolio sale to Mapletree logistics for approximately $142.2 million consisting of four assets and Property Links’ purchase of eight leasehold and freehold assets for $135.3 million. Four of these were in Melbourne. FIGURE 1 Melbourne Industrial Sales $ million total sales ($10mill+) Source: Knight Frank Research 0 150 300 450 600 750 900 1,050 1,200 1,350 2011 2012 2013 2014 2015 2016 CITY FRINGE EAST NORTH SOUTH EAST WEST 10 YR AVERAGE KIMBERLEY PATERSON Senior Analyst, Research & Consulting Follow at @patersonkimber1
Transcript of MELBOURNE INDUSTRIAL - Knight Frank€¦ · For the first time on record offshore buyers were most...
RESEARCH
MELBOURNE INDUSTRIAL TOP SALES TRANSACTIONS 2016
Key Facts
Industrial sales in 2016
totalled $878.8 million across
27 transactions
The Western region
continued to lead all
industrial precincts with sales
totalling $455.6 million
Yield compression continued
with prime core market
yields tightening by 29 basis
points in 2016
For the first time on record
offshore buyers were most
active accounting for 28% of
total sales by value
Boosted by a number of large sales with three transactions above $50 million, industrial sales in 2016 totalled $878.8 million, the third highest level achieved on record.
Investment demand across Melbourne’s
industrial market remained strong in 2016
with sales volumes achieving the third
highest annual level on record. Industrial
investment sales activity ($10m+) in 2016
totalled $878.8 million across 27 properties.
While 2015 was the highest total on record
($1.2 billion) volumes reached in 2016 were
65% ahead of the long term average.
Whilst demand for prime industrial property
remains strong, the significant weight of
capital combined with the limited Core
assets offered for sale has led to a rise in
demand for secondary grade properties. As
a result, prime yields compressed by 29
basis points in 2016 to range between
6.55% and 7.25% while secondary yields
compressed by 56 basis points to range
between 7.80% and 8.65%.
Transactional activity was boosted by a
number of significant sales with three
transactions above $50 million recorded in
the Melbourne industrial market over the
past year. In addition, there were a number
of key national portfolio sales that included
Melbourne assets with Growthpoint’s
portfolio sale to Mapletree logistics for
approximately $142.2 million consisting of
four assets and Property Links’ purchase
of eight leasehold and freehold assets for
$135.3 million. Four of these were in
Melbourne.
FIGURE 1
Melbourne Industrial Sales $ million total sales ($10mill+)
Source: Knight Frank Research
0
150
300
450
600
750
900
1,050
1,200
1,350
2011 2012 2013 2014 2015 2016
CITY FRINGE EAST NORTH
SOUTH EAST WEST 10 YR AVERAGE
KIMBERLEY PATERSON Senior Analyst, Research &
Consulting
Follow at @patersonkimber1
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With the lower Australian dollar combined
with falling interest rates there has been
an increasing level of investment from
offshore groups in 2016. Investment
activity from offshore buyers reached a
record high in 2016, leading all purchaser
types for Melbourne industrial property.
Volumes reached $248.1 million,
accounting for 28.3% of total sales by
value. Volumes were underpinned by the
sale of 31-49 Browns Road, Clayton
where Chinese developer Bewise
acquired the asset for $51.5 million. A-
REITs were also active purchasers, with
volumes totalling $170.1 million in 2016,
accounting for 19.3% of sales by value.
Charter Hall and Mirvac both made
acquisitions in 2016.
The West continued to attract the highest
proportion of the total sales by value
accounting for 52% of all sales,
underpinned by Charter Hall’s acquisition
of the Coles Distribution centre at 485
Dohertys Road, Truganina for $102.5
million.
The largest sale by value over the year
was recorded in the City Fringe precinct
with the Victorian Government
purchasing the General Motors Holden
(GMH) site at 241 Salmon Street, Port
Melbourne for $130 million.
FIGURE 2
2016 Melbourne Industrial Sales Breakdown by purchaser type ($10mill+)
Source: Knight Frank Research
Price: $130.0 million
Date: September 2016
GLA: 200,931m2
Rate/m2 of GLA: $647
Yield: N/A
1. 241 SALMON STREET, PORT MELBOURNE Vendor: GM Holden
Purchaser: Victorian State Government
Comments: The 37.7ha site with 200,931m2 of
existing buildings has been the GM Holden site
for 80 years. The property forms part of the
area designated by the Victorian Government
for future use as an employment precinct in the
Fishermans Bend Urban renewal area.
Price: $102.5 million
Date: August 2016
GLA: 69,074m2
Rate/m2 of GLA: $1,484
Yield: 5.39% initial
2. 485 DOHERTYS ROAD, TRUGANINA Vendor: RF Capital
Purchaser: Charter Hall
Comments: The Coles Distribution Centre is
located on 31.5ha of land and is fully leased
until June 2032. (WALE of approximately 15.8
years). There is development potential for an
expansion of the premises of up to 10,000m2.
Price: $51.5 million
Date: September 2016
GLA: 31,873m2
Rate/m2 of GLA: $1,615
Yield: 4.06% core market
3. 31-49 BROWNS ROAD, CLAYTON Vendor: Abacus Property
Purchaser: Bewise
Comments: The property comprises multiple
warehouse and office buildings, located on
6.08 hectares of land and is fully leased to PMP
Limited with a WALE of 6.7 years.
Price: $40.0 million
Date: June 2016
GLA: 4,880m²
Rate/m2 of GLA: $8,196
Yield: 1.75% Initial
5. 253-273 NORMANBY ROAD, SOUTH MELBOURNE
Vendor: Oxford University Press
Purchaser: R Corp
Comments: R Corp purchased the property
under a sale and lease back agreement to
Oxford University Press until March 2018. The
property also offers development potential
upside on the 0.7ha site.
Price: $40.0 million
Date: June 2016
GLA: 8,203m²
Rate/m2 of GLA: $4,496
Yield: 5.67% Initial
6. 810-848 KOROROIT CREEK ROAD, ALTONA NORTH
Vendor: Prixcar Services Pty Ltd
Purchaser: Charter Hall
Comments: The property is a 37.23ha vehicle
storage, preparation and distribution facility
fully leased to Prixcar with a WALE of 15 years.
Price: $41.9 million
Date: July 2016
GLA: 29,679m²
Rate/m2 of GLA: $1,414
Yield: 6.26% Initial
4. 39-53 HORSBURGH DRIVE, ALTONA
Vendor: Silman / Toll Properties Pty Ltd
Purchaser: LOGOS Property
Comments: LOGOS Property has acquired an
existing asset from Silman, land from Toll (Toll
Asset) and will complete an extension of the
existing facility and extensive development
works that will result in Toll committing to a
new 12 year lease from completion.
UNLISTED FUND/SYNDICATE
AREIT
DEVELOPER
UNDISCLOSED
OFFSHORE
OWNER OCCUPIER
GOVERNMENT
14.5%
19.4%
13.2%
5.7%
28.2%
4.2%
14.8%
INDUSTRIAL TOP 10 SALES 2016
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RESEARCH MELBOURNE INDUSTRIAL—TOP TRANSACTIONS 2016
7. 207—276 BAY ROAD, CHELTENHAM
Price: $36.8 million
Date: November 2016
GLA: 40,991m²
Rate/m2 of GLA: $898
Yield: 8.02% Initial
Vendor: Woodrose Family
Purchaser: Altis Property
Comments: Positioned across a 6.1ha site, the sale comprised of 10
assets along Brixton Road, Wangara Road and Bay Road. The
properties are all fully leased to a range of tenants.
9. 111 INDIAN DRIVE, KEYSBOROUGH
Price: $32.5 million
Date: August 2016
GLA: 21,660m²
Rate/m2 of GLA: $1,694
Yield: Undisclosed
Vendor: Frasers Property Group
Purchaser: Frasers Logistics and Industrial Trust
Comments: The property comprises a warehouse and office facility
located in stage 5 of the Key Industrial Park and is fully leased to Astra
Pool for a term of 15 years.
8. 28—38 SALTA DRIVE, ALTONA NORTH Price: $36.0 million
Date: March 2016
GLA: 23,845m²
Rate/m2 of GLA: $1,511
Yield: 6.85% Core
Vendor: F. Mayer Imports
Purchaser: Lend Lease (APPF Industrial)
Comments: Located on a 5ha site, the property was transacted in a
sale and lease back to national food distributor F. Mayer Imports for a
lease term of 12 years.
10. 182-198 MAIDSTONE STREET, ALTONA Price: $30.0 million
Date: August 2016
GLA: 44,406m²
Rate/m2 of GLA: $675
Yield: Undisclosed
Vendor: Private
Purchaser: Abacus Property Group/Gaw Capital
Comments: Located on an 8.3ha infill site, the office and warehouse
facility is currently occupied by Fronterra until July 2017. The
property also offers development potential upside.
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Office Top Sales
2016
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2016
Melbourne Industrial
Market Brief
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