Indigenous Business Australia pays $34m for WA highway service stations
Indigenous Business Australia has boosted the value of its investment portfolio to more than $500 million after buying two Caltex service stations on the Forrest Highway south of Perth for $34 million.
The fund, whose objective is to assist in the upward economic mobility of Aboriginal and Torres Strait Islander people, owns and manages a diverse national portfolio of commercial, industrial, retail and hospitality assets, including shopping centres, hotels and supermarkets.
As of June 2018, IBA’s investment portfolio was valued at $477.1 million with 57.8 per cent directly owned by IBA, 38.6 per cent by Indigenous investors and 3.6 per cent by private sector partners.
The investment portfolio delivered a return of 7 per cent for IBA in the 2018 financial year and 7.4 per cent for Indigenous co-investors.
Completed in 2017, the twin service stations known as Midway Northbound and Midway Southbound were acquired by IBA on a combined yield of 6.35 per cent.
They were sold with 20-year anchor leases to Caltex, along with a food court and five tenancies each, producing a combined net passing income of $2.2 million.
Developed by Perth-based syndicator Security Capital Australia (SCA), they were sold by Dawkins Occhiuto agents Chris Jones, Walter Occhiuto and Andrew Dawkins in conjunction with Savills’ Chris Ireland, Graham Postma and Paul Craig.
When the project was announced in 2016, SCA, which is led by Rodney Shea, put the value of the two service stations at about $37 million.
“Security Capital took the opportunity to put the properties to market at a time when mining exploration expenditure in WA is rising and investors are looking to take advantage of the positive growth prospects that will follow,” Mr Jones said.
IBA’s primary business is providing home loans with its mortgage portfolio worth nearly $1.2 billion. IBA is led by Rajiv Viswanathan, a former director at Macquarie Capital (US). The IBA board is chaired by Eddie Fry, a former director of mining company TNG Ltd.
