Woolworths’ Mulgrave distribution centre sold for $91m
The listed Growthpoint Properties Australia has offloaded a Woolworths national distribution centre and the attached Victorian state head office in Melbourne’s eastern suburbs to a private group in a deal worth $90.75 million.
The sale of the property, at 522-550 Wellington Rd, Mulgrave, was struck at a 37.7% premium to the June 30 book valuation of $65.9 million.
The asset comprises one of just two Woolworths national distribution centres, as well as the state head office, and stands on a substantial 19.1ha infill site with future redevelopment and rezoning upside.
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The property generates a net rent of about $4.7 million with fixed annual increases of 2.5% and a weighted average lease expiry of 3.8 years.
The Woolworths distribution centre occupies a substantial piece of potential development land.
Sale proceeds will be used to pay down existing debt, cutting Growthpoint’s gearing ratio to 38.4%.
This sale is in line with the group’s plans to realise upside from the sale of assets within the existing portfolio with future development potential to a higher and better use.
The Woolworths head office and distribution centre in Mulgrave.
Selling agents were Dawkins Occhiuto’s Andrew Dawkins and CBRE’s Chris O’Brien and Rory Hilton.
“The sale of the Mulgrave property is consistent with recent guidance that we would seek to realise material upside in the sale of assets with future development potential to a higher and better use,” Growthpoint managing director Timothy Collyer says.
The sale cuts Growthpoint’s gearing to 38.4% at the lower end of our target range and potentially positioned to make a play for Industria REIT in which took an 18.2% stake in back in July.
This article originally appeared on www.theaustralian.com.au/property.
