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Centuria hopes for big profit on sale of western Sydney industrial property

September 12, 2018

Centuria has high hopes for its South Granville industrial property. Photo: Supplied

Property funds manager Centuria is selling a western Sydney industrial property with price hopes in the “mid $20 millions” – an uplift of nearly $10 million in four years if it sells.

Centuria acquired 13 Ferndell Street, South Granville, for $16.1 million in late 2014 from Sentinel Property Group.

If it sells in line with expectations, it would represent a premium on its latest book value of $20.7 million.

Industrial property is continuing its streak from 2017, with many big players betting their money on warehouses. Photo: SuppliedThe interior of the 15,302-square-metre South Granville warehouse. Photo: Supplied

The 15,302-square-metre facility occupies a 2.67-hectare site and is tenanted by the BlueScope Steel.

The ASX-listed tenant pays about $1.5 million a year in net rent and the lease expires in 2020, with another seven-year option.

About 65,000 square metres of industrial stock had been withdrawn in the 2018 financial year to make way for residential and infrastructure development in Sydney’s central-west and south, LJ Hooker Commercial data shows.

This, combined with the growth of e-commerce and last-mile logistics, has created investor competition in a tightly held market, selling agent Gavin Bishop from Colliers International said.

“Given the low interest-rate environment and robust economic fundamentals in Australia, accompanied by the weight of capital chasing industrial investment product, significant demand for this asset is anticipated,” he said.

Dexus bought another property on the same street for $61.5 million. Photo: SuppliedDexus bought another property on the same street for $61.5 million. Photo: Supplied

LJ Hooker Commercial Silverwater’s Marcel Elias, also handling the sale, said Centuria was selling “to realise market value with an ASX-listed tenant attached”.

“The facility at 13 Ferndell Street will be one of the few premier infill industrial sites listed for sale in Australia this year in terms of scale, quality and proximity to arterial road networks,” he said.

On the same street, Dexus purchased a 10-hectare industrial asset through Savills for $61.5 million in late August – the biggest 100-per-cent freehold land sale in western Sydney in 2018 to date.

Dexus acquired the property at numbers 54-68 from private vendor Grand Sasanqua Pty Ltd, after beating six other offers.

The property giant will develop the site into a 56,000-square-metre facility for a variety of users, particularly e-commerce companies.

And last week, Charter Hall paid $71.6 million for a new logistics centre – still under construction – on 6.8 hectares in Prestons, in western Sydney.

Construction of the building at 55 Yarunga Street, which is expected to be more than 30,000 square metres, will be completed in the last quarter of 2018.

Expressions of interest for 13 Ferndell Street, South Granville, close on October 18.


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