Major industrial investment sells just shy of $50 million

Brisbane industrial

Sentinel Property Group has acquired a major industrial investment with development upside (STCA) within the prime Australia TradeCoast precinct at Pinkenba in Brisbane’s east for $48.5 million.

The waterfront bulk storage industrial facility located on a 140,006 sqm site at 69 Tingira Street, Pinkenba, was purchased in a leaseback arrangement with global diversified industrial chemical company Incitec Pivot Pty Ltd (ASX:IPL).

IPL will continue to run its fertiliser distribution centre from the site and will lease approximately 11.5ha of the property with 2.5ha on Soutter St available to Sentinel for further development.

The site benefits also from an adjoining wet lease of 15,370 sqm with associated wharf infrastructure.

The Pinkenba property, purchased through Anthony White and Simon Beirne of Colliers International, adds to Sentinel’s pooled Industrial Trust portfolio which includes properties at Mayfield in Newcastle, Oxley in Brisbane and Paget in Mackay.

Sentinel Managing Director Warren Ebert said this was a tremendous opportunity to acquire a major industrial facility in Pinkenba at a strong investment yield above what prime industrial assets are currently trading for, as well as benefitting from development upside.

“This site offers unique ongoing investment potential with core bulk storage and liquid storage assets in low supply throughout Brisbane, particularly when coupled with direct river access,” he said.

Recent sales of industrial facilities have reflected yields in the range of 5.5 per cent to 7.5 per cent. This property is being purchased at a passing net yield of 8.2 per cent.

“This is also one of very few sites with wharf access in Brisbane that can accommodate Handymax class vessels of up to 188m long and 34m wide and capable of both liquid and bulk cartage.”

Mr Ebert said it was an ideal time for Sentinel to purchase in the Australia TradeCoast precinct as it is a tightly held market due to the lack of available land.

“The proximity to Brisbane Airport, Port of Brisbane and major transport infrastructure continues to drive demand in this precinct,” he said.

“There are also some major infrastructure projects in play with Brisbane Airport Corporation funding over $2.5 billion worth of infrastructure over the next 10 years to keep up with the city’s growing demands.

“The Port of Brisbane is one of Australia’s fastest growing container ports and Queensland’s premier multi-cargo port, handling almost $50 billion in trade annually.”

Anthony White, Director of Industrial at Colliers International, said the TradeCoast precinct had been a focus for investor interest, underpinned by rapidly increasing leasing volumes.

"We are seeing more sale and leaseback activity, particularly from corporates which we expect will continue," he said.

Simon Beirne, State Chief Executive Qld, at Colliers International, said a 13 hectare freehold site on the Brisbane River with a seabed lease was a very rare offering.

"Land is becoming harder and harder to find, particularly with good access to major infrastructure," he added.

Established in 2010, Brisbane-based Sentinel Property Group has a total national portfolio of more than 40 retail, industrial, office, land, tourism infrastructure and agribusiness assets in Queensland, New South Wales, Victoria, Western Australia, the Australian Capital Territory and the Northern Territory with a total value in excess of $1 billion.

Roma Mitre 10 hot property for metro investor

Roma was the talk of the town when the historic Mitre 10 property went under the hammer at auction in Melbourne recently, selling to a Brisbane-based investor for $5.85 million.

Burgess Rawson selling agent David Ingram said that the imposing 7,098 sqm site is in the centre of Roma close to IGA, Woolworths and other national tenants, and was highly sort after at the auction with multiple bidders across three states.

“The property appealed to investors due to the strong tenant covenant, size of the business and lack of competition in the area. The Mitre 10 store currently services a regional population of over 12,500 people,” Mr Ingram explained.

“The owner had built this business up to be an extremely well-regarded hardware business before selling out to Metcash in 2013.

“Bidding took place in Brisbane, over the phone in Roma as well as in the auction room in Melbourne with the eventual buyer being a QLD based private investor.”

Mr Ingram said the buyer was attracted to the regional location and better yields that were on offer compared to metropolitan locations.

"In addition, Roma is a diversified regional hub which has a dynamic commercial property market," he added.

Situated at 49 McDowall Street, the main road site has 3 street frontages and produces a net income of $515,225 per annum.

The Roma Hardware Pty Ltd property is currently tenanted to a wholly owned subsidiary of Mitre 10 which is 100% owned by ASX listed Metcash. They currently hold a secure 10-year lease to 2023 with options to 2037.