Assembly, Cadence bank premium from Melbourne industrial portfolio
Assembly Funds Management and Cadence Property Group have quietly sold three Dandenong South industrial investments acquired in the six months to December, 2021.
The partners are banking $47 million against a $35.7m outlay – a 24 per cent premium.
The landlords also enjoyed rental growth contributing to a “meaningful value uplift despite significant interest rate rises,” according to AFM chief executive officer, ex-Westfield chief operating officer, Michael Gutman who formed the fund manager with Alceon and the Lowy family in 2019.
“While we continue to be believers in the tailwinds underpinning the industrial and logistics sector, the sale crystalises an attractive return for our investors and further bolsters our war chest in a time where we are beginning to see highly interesting for deployment,” he added.
The buyers are a mix of private investors and occupiers.
Following settlement, the manager has c$300m to deploy following the close of its second multi-sector real estate fund, with $465m committed equity.
Dandenong South portfolio
The priciest property is speculated to be 88-90 Nathan Rd, which cost AFM and Cadence $13.25m.
On 2.25ha abutting an Australia Post facility more than 10 times the size, it is leased to entertainment and event producer PRG (story continues below).
Another asset in the street – #51-65 – has also been divested. Occupied by Loscam, it cost $11.75m.
Both Nathan Rd investments were offered by private investor David Feldman. The blended yield was 4.4pc.
The third property AFM and Cadence have just sold – 345-353 South Gippsland Highway (pictured, top) – cost $10.7m following a two year leaseback deal with Aussie Disposals – again on a 4.4pc return.
This warehouse, spreading 4968 sqm, on 1.37ha, is selling following a failed recent leasing campaign seeking annual rent of $695,520.
“Momentum in the industrial property sector has certainly carried into 2024, the relatively short timeframe of this [portfolio] deal is clear evidence of that,” Cadence CEO, Charlie Buxton, said.
“We’re fortunate to have a strong relationship with AFM who share our belief of remaining pro-active in securing positive returns on our shared portfolio and reacting to market opportunities,” he added.
More to come.
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