Primewest has purchased a high quality, large scale industrial and logistics distribution centre in northern Adelaide for $22 million.
Paul Tierney, Gavin Bishop and Sean Thomson of Colliers International sold the 19,020 sqm facility in Salisbury South, on behalf of Tarranganda Pty Ltd, with a lease to Border Express a third-generation, family business, who have occupied the property as the sole tenant for in excess of ten years.
The property’s scale, strong lease covenant, secure WALE, future value-add potential and positioning in a core northern Adelaide industrial market, appealed to a range of investors.
“Improved interest in the Adelaide industrial market has been underpinned by significant Government investment in infrastructure, increased defence spending, and improved conditions for mining and energy investment along with the growth in e-commerce and transport logistics,” Paul said.
“Rarely is an asset of this prominence backed by a quality tenant covenant offered to the market; we saw the asset gain immediate market attention as the Border Express covenant provides one of the most secure cashflows in industrial real estate.”
Primewest have been one of the most active industrial investors in the market over the past year.
The acquisition of this property will be the 5th asset within the Primewest Industrial Income Trust No.3, nationally totalling approximately $80 million.
Gavin Bishop, Head of Industrial Capital Markets, Australia said amidst the current Covid-19 health crisis, the focus for investors has now become the occupancy, tenure and covenant solvency for well-located, income producing industrial real-estate.
“Given the low interest rate environment and robust underlying fundamentals of the Australian industrial and logistics market, accompanied by the weight in capital chasing defensive industrial investment product, we have seen continued demand from investors domestically and out of Asia, Europe and America,” Gavin said.
Sale and leaseback activity is expected to gather further momentum with corporates set to capitalise on the continued strength of the industrial and logistics market and favourable pricing metrics.
In 2019, almost $1.4 billion in sale and leaseback transactions was recorded, headlined by several significant transactions at the end of 2019.