ISPT to split its industrial portfolio in $250m play as Busway family buys
Part of ISPT’s Interchange industrial estate at Narangba in Queensland.
Property investment company ISPT is capitalising on the continued interest in industrial real estate by carving up a three-strong portfolio worth about $250m.
The fund manager has split a sale portfolio between two buyers; the Rowe family behind the Busway empire, which is buying in Sydney, and another fund manager, Irongate, which is buying in Queensland.
The deal shows that industrial property is winning both private and institutional capital, making it the key property investment category this year, despite once soaring rental increases slowing down.
Investors are being drawn to the area as private developers and institutions can reposition or expand properties even as conditions normalise after booming during the pandemic.
In the largest purchase, a company linked to the Rowe family has picked up an industrial estate on Kookaburra Road North in Sydney’s industrial heartland in Prestons for $115m.
Busways has grown to be the largest Australian family-owned bus operator with its network covering western and northwestern Sydney, much of NSW, and southern Adelaide, but the purchase is separate from the business. The complex spans 33,644sq m gross leasable area and sits on a 6.1ha site. The building is a modern facility developed by ISPT in 2022 and is leased to Invenco, Intercentral Logistics & Fieldturf Australia with 7.2-year weighted average lease expiry.
Irongate, which is understood to be backed by a major international privage equity firm, will pay about $140m for two Queensland assets. It is buying an estate on South Pine Rd in Brendale that has a gross leasable area of 31,738sq m on a 9.7ha site. The property is leased to VIP Plastic Packaging & Modern Star with a 3.7-year weighted lease expiry. It is also buying the Interchange Industrial Estate in Narangba which has a gross leasable area of 34,382sq m on a 10ha site. The property is leased to Bunnings, Apex Building Products, Cleanaway, Liquid Specialty Beverages, Avante, Merlin Marine & Leisure, and T-Pac Lumber.
ISPT’s facility at Brendale in Queensland.
It has a 4.9-year weighted average lease expiry.
The portfolio sale was handled by JLL’s Ben Hegerty and CBRE’s Chris O’Brien but they and the parties declined to comment. When they went on the block, ISPT said the sale was a part of its core fund portfolio recycling capital into development projects in its extensive logistics pipeline.
Investor demand for logistics and industrial assets is again running ahead of the beaten down office sector and more deals are in the pipeline.
Last month, two Asian investors committed to take a slice of a $3.2bn prime logistics portfolio. In that deal Japan’s Hankyu Hanshin Properties Corp. and another fund, believed to be from Malaysia, poured $536m into a new club that will own a slice of an 11-strong portfolio of warehouses, run by another Asian powerhouse, the ESR Group.
In another marquee industrial transaction, Taiwanese-backed developer Shayher snapped up the Gold Coast Logistics Hub from a mandate managed by Asian ESR Group for $200m, with the crisp yield showing investor confidence in the sector.
Investors are moving partly as values in the industrial market have already undergone a reset, making it more attractive to prospective buyers, and, at the same time, rentals in most areas are still on the rise despite softness on the outskirts of some cities.
While there has been a normalisation in the wake of the boom after the coronavirus crisis, companies are taking on fresh capital partners in the sector with Growthpoint striking a deal last month and Stockland readying to bring assets to market.
