News

Acquisition of three industrial properties in Victoria

7 May 2015

Growthpoint Properties Australia (“Growthpoint”) has exchanged contracts to acquire three modern industrial properties in Victoria for $56.9 million1 at a weighted average passing yield 7.84%. The properties have a weighted average lease expiry (“WALE”) of 6.8 years, a weighted average rent review (“WARR”) of 3.6%, gross lettable area of 37,694m. and total land area of 68,389sqm. They are located in Knoxfield, an established industrial precinct 27 kilometres south-east of Melbourne’s Central Business District.

The acquisition will be fully funded from debt available from the existing undrawn facilities taking Growthpoint’s gearing to 39.2%; in the middle of the target gearing range of 35%-45%. After this acquisition, Growthpoint will have $322.4 million available in undrawn debt for future acquisitions. Settlement of the acquisitions is expected to occur in five business days.

Property details:

Property

1500 Ferntree Gully Road & 8 Henderson Road, Knoxfield, Victoria

6 Kingston Park Court, Knoxfield, Victoria

3 Millennium Court, Knoxfield, Victoria

Purchase price

$36.55 million

$11.1 million

$9.25 million

Independent valuation2

$36.55 million

$11.1 million

$9.25 million

Property description

Modern office and warehouse facility with adjoining expansion land and extensive car parking.

Modern office and warehouse facility.

Modern office and warehouse facility.

Land area

40,844 sqm

12,795 sqm

14,750 sqm

Lettable area

22,009 sqm

7,645 sqm

8,040 sqm

Major tenant(s)

Brown & Watson International Pty Ltd; PFD Food Services Pty Ltd

NGK Spark Plug (Australia) Pty Ltd

Orora Limited

WALE

8.4 years

7.1 years

0.8 years

Renewal options

Two five year options

None further

One three year option

Passing yield/market yield

7.86%/7.25%

7.25%/7.25%

8.45%/7.75%

WARR

3.5%

4.0%

3.5%

 

About Knoxfield

Knoxfield is an established industrial precinct approximately 27 kilometres south-east of Melbourne’s Central Business District. The precinct has excellent access to major roads including Ferntree Gully Road, Stud Road and Eastlink. The area is tightly held and has limited available development land.

Impact on guidance

The transactions referred to above will be approximately 0.4 cents accretive to distributable income. However, due to the timing of the acquisition, will have minimal impact on the current financial year. As a result, guidance for the current financial year is unchanged being at least 20.6 cents per stapled security for distributable income and 19.7 cents per stapled security for distributions3.

Growthpoint’s Managing Director, Timothy Collyer, commented:

“Growthpoint is pleased to expand its industrial property portfolio with these modern warehouse property assets, leased to quality tenants, being well located in the tightly held suburb of Knoxfield.

The acquisitions increase both distributable income and the weighted average lease expiry which is now 6.2 years. Growthpoint’s industrial portfolio remains 100% leased and, although relatively small, the upcoming expiry at 3 Millennium Court gives Growthpoint an opportunity to extend the lease with a high quality tenant.

Growthpoint continues to look for acquisitions like this which enhance distributions and the property portfolio.”

 


 

Notes

  1. Excludes transaction costs.
  2. All three properties have been independently valued by CBRE.
  3. 9.8 cents was paid in respect of the six months ended 31 December 2014 and 9.9 cents is forecast for the six months ending 30 June 2015.