Taiwanese-backed Shayher snaps up Gold Coast Logistics Hub in marquee industrial transaction
Gold Coast Logistics Hub on Captain Cook Drive, Arundel.
The industrial property sector has emerged as the clear leader for big-ticket deal-making as the commercial property year draws to a close, with offshore buyers snapping up key assets and more deals to come as capital seeks growth.
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, precincts exposed to population growth and with good transport links are pulling away from other areas.
In one of the marquee industrial transactions of the year, 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.
The Gold Coast property was the largest core industrial asset to trade this year on a direct basis and comes after some industrial portfolios were recapitalised by new investors, and some development-linked deals were struck.
Taiwanese-backed developer Shayher snapped up the Gold Coast Logistics Hub from a mandate managed by Asian ESR Group for $200m.
ESR achieved very sharp pricing – with industry players reporting a 5.25 per cent initial yield and a reversionary yield of 5.8 per cent – after a competitive campaign via CBRE and Colliers. The strong result will lift confidence among both industrial players seeking to develop new stock, and landlords holding existing prime assets, who are also benefiting from lower bond rates.
The private buyer is heavily invested across Queensland in commercial and retail assets but the just-settled purchase marked its first foray into the industrial property sector.
The transaction was brokered by Chris O’Brien of CBRE and Gavin Bishop of Colliers but the agents and parties declined to comment.
The disposal represents a windfall for ESR and the capital which backed the massive development, Swiss-based Partners Group, with the purchase of the site seven years ago.
Fund manager Logos, which was acquired by ESR in a deal completed this year, joined with Partners Group to acquire a 22.16ha site on the Gold Coast to develop into a logistics facility in 2017.
The industrial infill site on Captain Cook Drive in Arundel, near Southport, was bought from consumer goods giant Colgate-Palmolive, which previously had manufactured onsite, and Logos developed the main site and also sold off some land parcels.
The huge logistics estate totalling 59,218sq m recently hit practical completion. It is on a 125,075sq m infill land holding in one of Australia’s strongest growth markets. It spins off significant net income of $10.49m per annum, which is below market rents of about $11.74m, with strong rental growth forecasts.
The Gold Coast Logistics Hub, with an outline on the seven buildings included in the sale.
The estate comprises three super prime warehouses and two multi-let unit states and key tenants include Australia Post, Team Global Express, Village Roadshow and Amazon.
There is a 6.32-year weighted average lease expiry, with a staggered lease expiry, providing security of income with the opportunity for the buyer to lift rents to market levels in future.
This could be a boon for Shayher, which has been buying Brisbane sites this year and already has a wide range of projects in the city, including plans for a $300m, four-tower “urban village” on the riverfront 1.5ha Kings Row office park in Milton.
Shayher founder John Lin is behind projects such as the Barracks urban renewal project in Bulimba, the W Hotel, a $250m commercial hub next to Capalaba Central Shopping Centre, a luxury housing estate at the old CSIRO site in Long Pocket and the Brisbane Quarter precinct.
The large-scale direct deal comes as a series of industrial portfolios are recapitalised.
US investment giant TPG Angelo Gordon this week pushed into the local property market by striking a deal with the listed Growthpoint Properties Australia under which it will take a majority stake in about $200m worth of industrial parks.
The deal is the latest in a run of big-ticket industrial sales which are bringing overseas capital into the market that’s attractive to investors, even as rent growth slows down.
In another play, two Asian investors this month committed to take a slice of a $3.2bn prime logistics portfolio run by ESR. Japan’s Hankyu Hanshin Properties and a Malaysian fund will pour $536m into owning a slice of an 11-strong portfolio of warehouses.
Citi analysts said that Growthpoint planned to grow the partnership into the future beyond this initial transaction and other players had also been chasing fresh capital. Stockland had been testing market interest in a portfolio and Aliro had been seeking a recapitalisation of its holdings.
The Goodman Group earlier this year sold off a near-$800m portfolio to superannuation giant Rest Super and US global investment manager Barings and is expected to offload more industrial properties as it focuses on data centres.
With the industrial property market well past the uncertain backdrop that held it back at the start of the year, more deals are expected as global capital chases the best that the industrial and logistics sector has to offer.
